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NVDA reports earnings on February 15.

The company expects fourth quarter revenue of $2.06 billion to $2.14 billion. The current consensus revenue estimate is $1.68 billion for the quarter ending January 31, 2017. Revenue grew 53.6% on a year-over-year basis, so we anticipate NVIDIA will beat again.

RSI is beginning to rise, as price moves back above VBP support at 106.00 (dashed horizontal). The recent pullback was on lower volume. If prices start to gain momentum on higher volume, this could signal an imminent move to higher levels. MACD is beginning to turn higher, as bearish momentum dissipates. Histogram is building shorter bars. Finally, Bollinger Bands are tight and ready to explode.

The SAR buy signal overhead at 109.81 is converging with price. If this triggers before earnings, the stock could accelerate higher.


Additional thoughts: The company’s chips are in everything.

“NVIDIA’s GPU simulates human intelligence, running deep learning algorithms and acting as the brain of computers, robots, and self-driving cars that can perceive and understand the world. NVIDIA is increasingly known as the artificial intelligence computing company.  If NVIDIA beats and guides higher, the stock will likely test recent highs.”

Finally, semiconductor stocks are receiving more attention as demand outstrips supply. Given NVIDIA’s strengths and the momentum in SMH, all of this buying should add more upside pressure to the stock as earnings approach.

We like the stock at 107.5(+/)  or better with a stop under Tuesday’s low, if you’re considering an entry today. Use the 5/15min charts for entry.

Happy Trading – Vinny

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