Last Friday we spotted strong momentum in Nvida (NVDA) and that push has not let up. You can see the article here. But now we aer watching to see if it is running out of steam and we can make money on it as it reverses.

Often with very strong upside momentum you will get a hard reversal and see the stock price snap back. It is exactly the same as a stock that gets beaten up by the media or the broader market and bounces up as it adjusts back to a real price. Take a look at where NVDA sits:

When momentum gets exhausted, this pattern pays out. To recognize the signs, click here.

See a battle starting to form as the wicks of the candles in the chart get longer and the bodies get smaller. This shows prices moving up and down through out the day. If we start to see a couple down days and a push to the 10 day moving average, this may be a great opportunity for a put option.

Lee Gettess has some exceptional tools he uses to confirm when momentum has become exhausted and a stock is about to reverse. We aren’t ready to grab the downside of NVDA yet but Lee’s approach will help us know when to take that trade.

Keep learning and trade wisely,

John Boyer

Editor

Market Wealth Daily