Nvidia's runaway gap could keep it king of the Nasdaq
Whilst Meta platforms has closed the gap with Nvidia in terms of YTD performance on the Nasdaq 100, Nvidia remains king of the crop having climbed over 170% from its 2022 low.
Prices blew past their previous record high set in 2022, and since consolidated around the current cycle highs. An initial inspection of the higher timeframes suggests it could be 'overbought' - at least over the near-term. But to expect a solid reversal of gains would likely require the combination of a broader market downturn alongside loss of confidence in AI (with the latter feeling unlikely at present). Therefor, a broader market downturn could simply provide the catalyst for a pullback and for AI-bulls to load up at more favourable levels. And if a downturn does not occur? We could be looking at a breakout from its current consolidation.
Assuming the recent swing lows hold and prices break higher, it could trigger another bout of technical buying from those who identified the 'runaway gap'. Such gaps tend to appear around the midway point of a strong trend, and mark another round of strong buying as those who missed the first move cannot sit on their hands any longer. And with the AI frenzy unlikely to peter out for some time, perhaps a bullish breakout isn't so crazy (even if the charts suggest it could be overbought by some measures).
Prices blew past their previous record high set in 2022, and since consolidated around the current cycle highs. An initial inspection of the higher timeframes suggests it could be 'overbought' - at least over the near-term. But to expect a solid reversal of gains would likely require the combination of a broader market downturn alongside loss of confidence in AI (with the latter feeling unlikely at present). Therefor, a broader market downturn could simply provide the catalyst for a pullback and for AI-bulls to load up at more favourable levels. And if a downturn does not occur? We could be looking at a breakout from its current consolidation.
Assuming the recent swing lows hold and prices break higher, it could trigger another bout of technical buying from those who identified the 'runaway gap'. Such gaps tend to appear around the midway point of a strong trend, and mark another round of strong buying as those who missed the first move cannot sit on their hands any longer. And with the AI frenzy unlikely to peter out for some time, perhaps a bullish breakout isn't so crazy (even if the charts suggest it could be overbought by some measures).
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