nVidia | 60%Countercyclical Trade? Corporate Rally Before Crisis

Earlier this year we prepared and then shorted nVidia after discovering the technical bubble:

This bubble is now in the process of bursting. However, nothing goes to heck in a straight line, and we may have an opportunity to get long for a rebound trade before the stock continues its downturn.

Watch the gaps that have formed on the 4HR, which could very well indicate where we may trade as we go back to test the support or resistance at those levels. Above 143 we are bullish, below 132 we are likely consolidating or may breakdown further.

This idea follows our thinking related to the overall market measured through the Nasdaq (NDX):

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Above $125 we are still on track and have good odds to breakout of the downtrend...

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Watch for a gap down on the next open...

We have a nice doji on the weekly, but we really need to get over the confirmation ($143) to set this trade in motion. As you can see, the confirmation sits right on the weekly EMA200:

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Breakout!

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Watch for a reversal here... we have volume at super lows and have kissed the .618 of the swing.

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we've got a megaphone pattern on the lower TFs, which is a contiunation pattern here.

Look at that massive volume profile

And here is the weekly where there shoudlr eally be nothing stopping this upward swing until the EMA50 around 200$

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REKT on the open! But we are still above support... today's close will be super important. Below $127 we are bearish..

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AMD out-performing ;)

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At this point we will probably not fill the gaps based on the overall index getting stretched.

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We now have a strong line of resistance coming up, and this may provoke a sell-off / consolidation. Don't forget to watch the index as well.

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Breakout!

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While i'm still involved, watch for a sharp sell-off as equities continue to struggle. Remember, the overall picture in this pair on the 4HR is cyclical BEAR. This was a countercyclical trade with higher risk but also higher reward. Watch the US treasury yields as well.

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After getting stopped out the market went raging on! Oh well. Now closing the first gap.

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