NVDA: Double Bottom

(Click on charts to enlarge, then click on them again for further enlargement. Use left arrow on your browser to return to the narrative).

Charts sometimes exhibit "fractal behavior," which is just a fancy way of saying "patterns that repeat," a recent example of which is the three Ascending Triangles in Goldcorp (GG) that we've looked at. In that chart, the third Ascending Triangle showed up in a shorter time-frame, the 10-Minute intraday chart, which was a reiteration of the two Ascending Triangles seen in the daily chart.

On occasion when a pattern is repeated, it's reversed, like a H&S Top, followed by an Inverse H&S Bottom.

In the chart of NVDA, we have a Double Top, followed by the same pattern, only the pattern is reversed: it's a Double Bottom, which broke out on Friday. The Double Bottom has a narrower trading range than did the Double Top, but it's a Double Bottom, nonetheless. Since the Double Top had a "3-day Knuckle-Biter" for The Bears after the technical breakdown, that's something to watch for in the intraday charts of NVDA, to see if the fractal behavior is going to continue, especially since the 34/55RSIs currently are at Bearish Synchronicity, which represents possible resistance here.

The Bearish Synchronicity is noted by the red "34S" above Friday's high in this chart and is explained in the next chart of the 21, 34 and 55 Fibonacci Sequential Measures of Relative Strength (RSI's).

The remaining charts have notes on them, and should be self-explanatory. Yahoo Earnings calendar has earnings slated for something like June 29, but I think NVDA reports much sooner than that, maybe May 13. Check that. We saw in Saturday's post on RIMM a stunning example of how important the market's REACTION to earnings can be.







The Double Bottom breakout is against the dominate trend since The Bears control the Kumo (Cloud), so we need to be mindful of that. In addition to there never being any guarantee that any target will get MADE, targets that are against the dominant trend are less likely to get MADE than targets that are with the trend.

That said, The Bulls have some "open field running" here, since the top of Kumo (first objective) and the target of 22.27 both are below the Double Top low of 22.37, which represents the bottom of the "overhang of sellers," i.e., longs who didn't sell the Double Top breakdown, and who still are trapped inside the Double Top.