NVIDIA Corporation (NASDAQ:NVDA) has been roaring higher. In 2016, $NVDA has gone from $24.75 to a high this week of $47.50. That is a monster gain of 92%. Good news from the company mixed with massive short covering has created this insane pop. Pops of this magnitude are not sustainable. The stock will need to retrace before it can possibly think about going higher.
The pull back may be at hand with the weekly chart showing a topping tail. Topping tails are very bearish signals. It essentially tells you that the amount of sellers are now bigger than buyers. With so many buyers still holding (the bag), many will get scared and sell creating more downside. This is a healthy pull back but can be profited from via shorting or put options. Note the chart below.
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