NVIDIA Stock | $NVDA | Shares Breifly Dip Lower Despite Record Earnings


NVIDIA Corp. Earnings

On Thursday after the market closed, NVIDIA Corp. announced record fourth quarter earnings results that topped analyst expectations, however, shares were lower following the announcement by over 8% before bouncing back later in the evening.

The company announced adjusted earnings per share of 99 cents on $2.2 billion in revenue while analyst were expecting earnings per share of 83 cents on $2.1 billion in revenue. This is up from the same period last year where the company reported earnings per share of just 35 cents marking a 183 percent jump.

“We had a great finish to a record year, with continued strong growth across all our businesses,” said Jen-Hsun Huang, founder and chief executive officer of NVIDIA. “Our GPU computing platform is enjoying rapid adoption in artificial intelligence, cloud computing, gaming, and autonomous vehicles.

The company reached $6.91 billion in revenue for fiscal 2017 compared to $5.01 billion from the year before.  This is the strongest quarter/year in the company’s history and it doesn’t look like it is slowing down anytime soon.

NVIDIA Stock Technicals

 nvidia stock

 As you can see from the 5-minute chart above, NVIDIA stock prices were slightly confused after fourth quarter earnings hit the wire. They dipped all the way down to $107 after closing the Thursday at $116.38 before popping back up to $117.72 which is currently post-market highs. Shares will likely be more volatile than normal as the stock will be on a lot of traders radar.

Some key pivot levels to take note of is the $120 pivot and the all-time highs at $120.92 where we should see some resistance. Support will likely be met at $112, $111.47 where the 20-day moving average is and the current post-market lows at $107. Shares are well above their 200-day moving average at $69.80 and their 50-day moving average at $104.08.

If shares can gain some momentum and get over yesterdays high of $119.06 then I think this could make run to test all-time highs over the coming days. If shares have a hard time punching through that level then we will likely see a pull back into the $112 range.

Oscillators are starting roll over from overbought conditions as well which may put further selling pressure on the stock but we will have to wait and see how traders move prices over the coming days to see if that is true. If you’re looking to trade this stock make sure to trade off important levels and to use hard stops as this will be a volatile trader the next couple days.

nvidia stock 

Looking at the daily chart above you will notice that shares have been on a strong uptrend that goes back even further than this chart shows. Share prices have been on a steady rise through 2015 and 2016 while maintaining the 50-day moving average (red line) the whole time. Going forward we will want to see the same behavior and as long as it maintains prices above the 50-day moving average we can assume that buyers are in control.

Looking Forward

 NVIDIA stock has been one of the best performers in 2016 and is not looking to slow down anytime soon. With record earnings and a positive outlook we could see a fresh batch of buyers step in and life prices higher. However, in the short term we could see some profit taking as oscillators are over bought on the higher time frames and shares are fairly over extended.

I think NVDA has the potential to continue its run into 2017 and as they dip into the artificial intelligence arena there will be plenty of market share up for grabs.

Deep learning on NVIDIA GPUs, a breakthrough approach to AI, is helping to tackle challenges such as self-driving cars, early cancer detection and weather prediction. We can now see that GPU-based deep learning will revolutionize major industries, from consumer internet and transportation to health care and manufacturing. The era of AI is upon us,”  said Jen-Hsun Huang