NVIDIA Stock Price Prediction (and a Contrarian Swing Long Coming Soon)

TradeCompass for NVIDIA Stock: Contrarian Long Opportunity Amid Pre-Market Decline

At the time of this analysis, NVIDIA (NVDA) is trading at $128.40, down nearly 10% in pre-market from Friday’s close. This presents an intriguing contrarian long opportunity for swing traders, leveraging key support levels from historical value areas and VWAP deviations. Below is a detailed trade idea based on volume profile analysis:

Trade Setup

Entry Levels (Equal Buys):

1. 127.25 – Near the value area low (VAL) from December 19th and October 7th, as well as close to the pivot point formed on December 18th.
2. 125.93 – Strategically placed between the first buy level and the third lower VWAP deviation of December 20th, adding more support to the zone.
3. 124.67 – Near the extended support around the third lower VWAP deviation from December 20th.

Stop Loss:

• 122.67 – Placed $2 below the final buy level, ensuring defined risk while allowing room for volatility.

Profit Targets (Partial Profits Encouraged):

1. 129.93 – Just under the value area low (VAL) of January 14th.
2. 132.62 – Close to the value area high (VAH) of January 27th.
3. 138.86 – Under the VWAP from January 21st and near the $140 round number, offering a logical resistance level for a runner.

Execution Notes:

• Equal Allocation: Buy 100 shares at each of the levels: 127.25, 125.93, and 124.67.
• Risk-Reward: The stop loss at 122.67 ensures a manageable downside, while the profit-taking structure emphasizes maximizing gains with partial profits and leaving a runner for a potential larger move.

The Logic Behind the NVDA Stock Plan

1. Volume Profile Support Zones:

   • The levels between 127.25 and 124.25 align with historical value areas and pivots, making this zone a critical area of extended support.

2. VWAP Deviations:

   • The third lower VWAP deviation from December 20th near 124.25 offers additional technical backing, marking an area where price is statistically overextended.

3. Pre-Earnings Setup:

   • Swing traders can benefit from a potential recovery bounce ahead of NVIDIA’s earnings, leaving flexibility to either close out the trade fully or hold a part of the Long (after taking partial profits before the earnings scheduled on 26 Feb 2025), AKA ‘runner’ into the report. Again, at your risk only. Do your own research and treat this is an opinion and possible orientation.

4. Risk Management and Partial Profits:

   • The TradeCompass approach emphasizes managing risk and taking profits at key levels to avoid disappointment from missed targets, while allowing a portion of the trade to benefit from larger moves.

TradeCompass Takeaway

This contrarian long trade idea provides a structured approach to capitalize on NVIDIA’s pre-market weakness, targeting a recovery toward key levels. While this analysis offers a framework for swing traders, execution and risk decisions are entirely up to the trader.

Trade at your own risk, and stay tuned for more TradeCompass insights!

This article was written by Itai Levitan at www.forexlive.com.