NVDA Analysis of a long trade

A retrospective analysis of a long trade using NVDA

Recently, we have seen many articles arguing that the market is overvalued, the bubble is giving .com era vibes and so on. Whilst there is certainly some truth to such claims, these statements stem from emotional outbursts based on fomo, fear and not knowing where the market is going. As investors/traders we need to have the ability to read the market with objectivity.

Here, a customized multi timeframe directional momentum indicator is illustrated. The ideal long entry point coincides with divergence of the long and short momentum lines highlighted by the curved yellow markers.

As price moves up, we note that the indicator remains in a consistent trajectory. As the indicator is based on data across multiple timeframes, minor corrections are smoohed out.

Recently we have seen some sideways price action but when do we take profits or even go short? There is no straight answer at this point in time. Here, do not attempt to predict a trend reversal ahead of time, but merely try to depict the actions/intent of all market participants on a chart.

For a short trade, we would need to see both directional lines move in opposite directions at a gradient of at least 0.6 radians (approx. 34 degrees).