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NVDA Selling Off Hard! Stock Prediction Using Expected Moves

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Hello, everyone! Today, we’re going to dive into an analysis of Nvidia’s recent performance and discuss what might lie ahead for this tech giant. In particular, we’ll use a concept called “expected moves” derived from the options market to gain insights into potential price movements.

Current Market Overview

Nvidia, like many other companies in the market, has been facing some challenges recently. Factors like the Federal Reserve’s discussions and market panic have put pressure on stocks. We’ve seen the market in a downward trend, and Nvidia has been no exception.

Understanding Expected Moves

Expected moves, a concept from the options world, help us estimate potential price fluctuations. Think of it like driving on the highway. Most cars stick to the speed limit, but some go a bit faster, and some a bit slower. This creates a typical range of speeds, say between 70 and 90 miles per hour. Now, occasionally, you might see a car going much faster or much slower, representing outlier situations.

Bringing Expected Moves into Nvidia Analysis

Now, let’s apply this concept to Nvidia. If we look at Nvidia’s options market for the next 30 days, we find an expected move of $40. This means that, given the current stock price of $410, Nvidia could potentially move up by $40 to $450 or down by $40 to $370 within this timeframe. This range represents a one standard deviation move.

Standard Deviation and Probability

In the world of statistics, one standard deviation typically encompasses about 68.3% of the data. For stocks, this means that there’s a high probability (68.3%) that Nvidia’s price will fall within this $40 range. But remember, stocks can sometimes make larger moves, so we also look at two standard deviation moves, which cover about 95.5% of the data.

Range of Possibilities for Nvidia

With this understanding, we see that Nvidia has the potential to reach as high as $490 or as low as $330 in the next 30 days. However, these scenarios are less likely, with the higher probability being within the $370 to $450 range.

Considering Technical Analysis

Technical analysis complements this data. For example, looking at the chart, we can see that there’s a support zone around $375 to $380. A significant gap exists at $320, which could serve as another support level. Resistance might be encountered around $480.

Trend Analysis

Analyzing trends using moving averages is also helpful. The 89-day exponential moving average (EMA) provides insights into whether the stock is in an uptrend or downtrend. Currently, it’s trending downwards, indicated by red bars.

Potential Scenarios

In summary, from a non-biased perspective based on expected moves, we anticipate that Nvidia could reach $370 to $450 in the next 30 days. However, other factors, such as the company’s financial health and market sentiment, can influence this.

From a more cautious standpoint, if the stock experiences a pullback, it might find support at $375 to $380 or even the gap around $320.

Final Thoughts

Remember, while these analyses provide insights, they don’t guarantee future performance. The stock market is influenced by various factors, and it’s crucial to consider all available information and make informed investment decisions.

Thank you for joining me in this analysis. If you’re interested in learning more about options or other aspects of trading, be sure to check out our website, tradersfly.com, where you can find courses, free resources, and even schedule a one-on-one coaching session.

Stay informed, make well-reasoned choices, and I look forward to seeing you in the next video. Take care and happy trading!

In this class we will focus at looking at the technicals, learning about charts, how to check for support resistance, strength of the move, indicators, understanding price movements, ABCD patterns, and more! Ready to take your technical analysis to the next level? ​

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