Stepping Inside the Sudden Snapback in NVDA

Feb 13, 2017: 3:44 PM CST

If you like “fade” trades or capturing sudden snap-back set-ups, you’ll want to view this on NVIDIA.

Let’s start with the snap-back and focus on the evidence that build the strong case for the snap-back we’re seeing:

We prefer trading WITH the trend instead of against it, but we also understand that’s not the best trading strategy for everyone.

Aggressive or experienced traders can take advantage of situations like this where a “sudden snap-back”  develops and then triggers.

You can actually make money quicker with these events than waiting out a trend swing to develop.

I’m showing TWO snap-backs in the uptrend of NVIDIA above – the first was in December.

In February’s event, we had our indicator trifecta that sets up this opportunity:

In an uptrending stock, we’re looking for…

  • REVERSAL CANDLES to develop into the Upper Bollinger Band
  • a NEGATIVE VOLUME Divergence along with
  • A NEGATIVE MOMENTUM Divergence.

These factors aligned visually for NVIDIA into the $120 per share level.

The first target for a rapid snap-back is always the rising 20 day EMA (achieved at $112).

The second target opens up beneath the 20 day EMA toward the 50 day EMA currently at $104.

Here’s the “step-inside” perspective of this set-up and how it gave aggressive players rapid profits:

First, put the hourly chart in context of the Daily Chart, particularly with the visual divergences there.

The set-up triggerd on the gap-up and reversal – like that of late December – beneath the $117 level.

From there, two days of price action (selling domination) collapsed the price under its Daily target.

At the moment, if buyers fail to rally share prices up away from the $108.00 target, we could see a continued sell-swing toward the 50 day EMA target of $104.

However you play this, add this example to your growing knowledge of trending stocks and aggressive “snap-back” tactics (not for new traders!).

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Corey Rosenbloom, CMT

Afraid to Trade.com

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1 Comment

One Response to “Stepping Inside the Sudden Snapback in NVDA”

  1. Intelligent Trend Follower Says:

    Thanks for the detailed analysis Corey. This is really helpful (especially as a long-term NVDA long). Will be curious how it sees to get to your targets.