Why I Sold NVIDIA (NVDA) at $133.23: A Technical Analysis Approach
Yesterday, I sold my NVIDIA (NVDA) shares at $133.23. This decision was driven by clear signals from Exponential Moving Averages (EMA) and the Directional Movement Index (DMI), both indicating that NVDA’s bullish momentum was losing steam. Here’s a breakdown of the analysis that led to my decision:
1. Exponential Moving Averages (EMA) Indicate Weakening Momentum 📉
The EMA indicators on the chart pointed to a slowing uptrend, suggesting that NVDA might struggle to push higher:
• EMA5 (132.54) and EMA10 (134.06) were very close to the selling price of $133.23, signaling short-term resistance. The fact that EMA10 was slightly above the selling price suggested that the price could face difficulty breaking through this level.
• EMA20 (132.55) was also near the current price, reinforcing a potential resistance zone. The flattening of these short-term EMAs indicated weakening bullish momentum.
• While EMA50 (116.46) and EMA120 (84.63) were still trending upward, their separation from the current price wasn’t expanding significantly, signaling that the long-term uptrend might be losing strength.
With these EMAs showing signs of slowing momentum and approaching resistance, it made sense to lock in profits at $133.23.
2. Directional Movement Index (DMI) Signals Trend Fatigue ⚠️
The DMI (14,6) provided further confirmation for the sell decision:
• +DI (22.79) was slightly lower than -DI (26.35), indicating that bullish strength was waning while bearish pressure was building.
• ADX (17.36) had dropped below 20, suggesting a weak trend overall. A declining ADX indicates that the market is losing its directional strength, often a precursor to a consolidation phase.
• ADXR (24.38), although slightly higher than ADX, didn’t suggest sustained strong momentum, reinforcing the idea that the trend was fading.
These DMI signals, combined with the EMA indicators, suggested that NVDA’s recent bullish run was losing traction, making it a good time to exit.
3. Price Action and Resistance Levels 🛑
The price repeatedly struggled to break above $134.44, a clear resistance level on the chart. Even with some bullish attempts, NVDA couldn’t sustain higher prices. Additionally, the volume didn’t significantly increase to support a breakout, which further indicated that the market lacked the conviction to push the stock higher.
Given these factors, selling at $133.23 allowed me to capitalize on the recent rally before a potential pullback.
Conclusion
By analyzing both the EMA and DMI indicators, it was clear that NVDA’s bullish momentum was weakening, and the stock was facing significant resistance. Selling at $133.23 was a strategic move to lock in profits and mitigate the risk of a price correction. This decision underscores the value of technical analysis in making informed trading choices$NVIDIA(NVDA)$
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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