28Aug2:42 pmEST

Legs for Days During NVIDIA's August

With just over three sessions left before the month of August concludes on Wall Street, NVIDIA's monthly candlestick (arrow, below on monthly chart) is shaping up to close with a "long-legged doji."

Courtesy of Investopedia.com, here are some important points about long-legged dojis:

Thus, as the last point notes, no guarantees. But then again that is always the disclaimer which needs to be said in our business. 

However, in light of NVDA's valuation, steepness, euphoric bulls, and overall narrow market action with a tightening Fed amid sticky inflation, I continue to look for these types of candles to amount to meaningful reversals. If so, then NVDA has topped for the year, and last week's earnings fade likely signified that the stock had, indeed, been priced to perfection with all good news baked into the cake for the foreseeable future. 

The good news, whether you agree or disagree with my view, is that we both have well-defined goalposts now: Back above $500 negates the bear view and long-legged doji reversal, while under $400 gets the ball rolling downhill for confirmation.

You simply cannot get any more straightforward than that in this business, especially with big, round numbers on a marquee stocks. So enjoy it while it lasts. 

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