NVIDIA plummeted 13%! What are the real selling factors? What are the lower price meds?
$NVIDIA(NVDA.US$After hitting an all-time high on a closing price basis on 6/18, it fell, and by the 24th13% declineI did it.Does this sharp drop mark the end of the AI boom, or is it simply a speed adjustment。In order to find the answer, we will examine the true selling factors. I also want to check the low price medalsI think.
The following three main factors are the factors behind NVIDIA sales this time.
1) The upward pitch was too fast
2) sector rotation
3) Supply and demand factors
1) The upward pitch was too fast
When I checked NVIDIA's stock price and 200-day moving average, both continued to rise. However,Since the upward pitch of stock prices was too fast, the divergence rate from the 200-day moving average widenedI did it. When a high price was set on 6/18, the divergence rate reached 98%. Based on past cases,When the divergence rate is close to 100%, will stock prices stand still or adjustI did it.
2) sector rotation
If you check the US market after 6/18, when NVIDIA stocks were adjusted,Aspects of sector rotationIt was presented. In terms of the gain/fall rate of the S&P 500 Index by industry, NVIDIA is at the topInformation technology composed of semiconductors was soldOn the other hand,Energy, public utilities, etc. were bought。
If you check the US market after 6/18, when NVIDIA stocks were adjusted,Aspects of sector rotationIt was presented. In terms of the gain/fall rate of the S&P 500 Index by industry, NVIDIA is at the topInformation technology composed of semiconductors was soldOn the other hand,Energy, public utilities, etc. were bought。
sector rotation backgroundIn addition to a sense of caution about high prices against semiconductor stocks and review purchases for overdue stocks, position adjustments while reaching the end of the June fiscal year also seem to have had an impact.
3) Supply and demand factors
●Position adjustments by institutional investors at the end of the June fiscal year
Not only are NVIDIA shares popular with individual investors, but the ownership ratio of institutional investors is also relatively high. Many institutional investors tend to adjust their positions at the end of the quarter. For example, if the holding ratio of a stock whose stock price has risen significantly exceeds the fund's upper limit rule, it is necessary for the fund manager to lower the ratio (sell the stock) for that stock. When I checked the trading trends of institutional investors on the Bloomberg terminal, there were many funds that reduced their positions after 6/18.
● Triple Witching and Long Squeeze
6/18 is triple witching, and it is a day when individual stock options, stock price index futures, and stock price index options expire once a quarter. There are also voices pointing out that option transactions and long squeezes had an impact on stock prices.
● Decline in expectations for large inflows of funds due to ETFs
Bloomberg published an article on 6/11 titled “Is the NVIDIA Ratio Rapid Rise? Apple Sales Too - Reallocation of Large Tech ETFs” (Japanese version 6/12). According to Bloomberg Intelligence (BI), if NVIDIA maintains an advantage over Apple as of the 14th (based on market capitalization), it will be on the scale of 67 billion dollars $The Technology Select Sector SPDR® Fund(XLK.US$There was a possibility that the NVIDIA ownership ratio would rise drastically. In that case, it was estimated that the XLK operating company might need to buy the equivalent of 10 billion dollars of NVIDIA shares.
However, after 6/11, $Apple(AAPL.US$has unexpectedly skyrocketed. It regained 2nd place from NVIDIA on a market capitalization basis. In response to that, BI announced on 6/14,”The forced sale of Apple shares of 11 billion dollars and the forced purchase of NVIDIA shares were seen as likely to be realized on 6/10, but they may not be realized now.” I wrote it in the report. Since the 6/11 article attracted a great deal of attention, there may have been many investors who expected massive NVIDIA stock buybacks from ETFs. Expectations have declined so far due to the sudden rebound in Apple stocks.
●Position adjustments by institutional investors at the end of the June fiscal year
Not only are NVIDIA shares popular with individual investors, but the ownership ratio of institutional investors is also relatively high. Many institutional investors tend to adjust their positions at the end of the quarter. For example, if the holding ratio of a stock whose stock price has risen significantly exceeds the fund's upper limit rule, it is necessary for the fund manager to lower the ratio (sell the stock) for that stock. When I checked the trading trends of institutional investors on the Bloomberg terminal, there were many funds that reduced their positions after 6/18.
● Triple Witching and Long Squeeze
6/18 is triple witching, and it is a day when individual stock options, stock price index futures, and stock price index options expire once a quarter. There are also voices pointing out that option transactions and long squeezes had an impact on stock prices.
● Decline in expectations for large inflows of funds due to ETFs
Bloomberg published an article on 6/11 titled “Is the NVIDIA Ratio Rapid Rise? Apple Sales Too - Reallocation of Large Tech ETFs” (Japanese version 6/12). According to Bloomberg Intelligence (BI), if NVIDIA maintains an advantage over Apple as of the 14th (based on market capitalization), it will be on the scale of 67 billion dollars $The Technology Select Sector SPDR® Fund(XLK.US$There was a possibility that the NVIDIA ownership ratio would rise drastically. In that case, it was estimated that the XLK operating company might need to buy the equivalent of 10 billion dollars of NVIDIA shares.
However, after 6/11, $Apple(AAPL.US$has unexpectedly skyrocketed. It regained 2nd place from NVIDIA on a market capitalization basis. In response to that, BI announced on 6/14,”The forced sale of Apple shares of 11 billion dollars and the forced purchase of NVIDIA shares were seen as likely to be realized on 6/10, but they may not be realized now.” I wrote it in the report. Since the 6/11 article attracted a great deal of attention, there may have been many investors who expected massive NVIDIA stock buybacks from ETFs. Expectations have declined so far due to the sudden rebound in Apple stocks.
Note, BI decided that XLK would decide the final decision based on the total market value of each company after adjusted floating stock. At the same time, “considering that the total market value range of the 3 brands is narrow, even if an upper limit on NVIDIA's weight in XLK was set again in June,There is a good chance that it will eventually overtake Apple and Microsoft” andKeep an eye on the next reference date (9/13) for XLK rebalanceI decided to do that.
Note, in addition to the above,There are also voices pointing out that high valuations and sales of shares held by management are also factors in the declineIt's there.
●NVIDIA's valuation
Before the fallExpected PER for 6/18 is 48 timesSo,It was slightly higher than 40 times the SOX index. However,Based on the fact that NVIDIA's profit growth rate is outstanding among semiconductor stocks and is high、Not an abnormal height. However, it is undeniable that the 48x level itself was above the past average, was in the overpriced region, and was a level that made people aware of high price alert. Note, after a 13% decline in 3 days, NVIDIA's predicted PER has dropped 42 times as of 6/24.
Before the fallExpected PER for 6/18 is 48 timesSo,It was slightly higher than 40 times the SOX index. However,Based on the fact that NVIDIA's profit growth rate is outstanding among semiconductor stocks and is high、Not an abnormal height. However, it is undeniable that the 48x level itself was above the past average, was in the overpriced region, and was a level that made people aware of high price alert. Note, after a 13% decline in 3 days, NVIDIA's predicted PER has dropped 42 times as of 6/24.
● Sale of shares held by management
According to the notification materials, CEO Jenson Huang and CFO Colette Kress each sold their own shares last week.This sale is not necessarily large-scale, but since there are more than in the past, there is a possibility that it was an opportunity for some traders to follow suitIt has been pointed out. Note, in the United States, the sale of shares held by management is recognized as part of remuneration, and there is no need to react abnormally to it itself. CEO Juan's sale is in line with the sale plan announced in March this year. On the other hand, there may be a possibility that the sale of management will weigh on stock prices in the short term.
According to the notification materials, CEO Jenson Huang and CFO Colette Kress each sold their own shares last week.This sale is not necessarily large-scale, but since there are more than in the past, there is a possibility that it was an opportunity for some traders to follow suitIt has been pointed out. Note, in the United States, the sale of shares held by management is recognized as part of remuneration, and there is no need to react abnormally to it itself. CEO Juan's sale is in line with the sale plan announced in March this year. On the other hand, there may be a possibility that the sale of management will weigh on stock prices in the short term.
Overall, the real reason for NVIDIA stock sales is thought to be profit margin sales because the upward pitch was too fast. There is also an increase in reports and articles comparing companies affected by the dotcom bubble that burst 24 years ago in response to the sharp drop in NVIDIA stocks.Overall, at the time $Cisco(CSCO.US$When compared to, there are many views that NVIDIA's growth story isn't over yet。
●NVIDIA's past cases
Based on NVIDIA's own past cases, it turned into a buying advantage when it fell by about 20% (*). When calculated from the current high price (the highest price in history during the market), the stock price when it falls 20% is approximately 112.61 dollars.
(*Details are dated 4/23”[NVIDIA falls 10%] What is the real factor? What are your future highlights?(See”.)
●Technical analysis
According to Bloomberg, most technical analysts are searching for lower price support lines based on Fibonacci. Buff Dormeyer, chief technical analyst at Kingsview PartnersThe short-term support line is near $115、The next milestone is $100(The 50-day moving average is 101 dollars). These two levels seem to be levels that many technical analysts are also paying attention to.
Looking at it comprehensively, $NVIDIA(NVDA.US$Regarding,For the time being, it's around $112 to $115, and it seems necessary to keep a close eye on whether there is lower price support. It seems safe to say that the benefits of the AI boom can still be expected in the medium to long term.
According to Bloomberg, most technical analysts are searching for lower price support lines based on Fibonacci. Buff Dormeyer, chief technical analyst at Kingsview PartnersThe short-term support line is near $115、The next milestone is $100(The 50-day moving average is 101 dollars). These two levels seem to be levels that many technical analysts are also paying attention to.
Looking at it comprehensively, $NVIDIA(NVDA.US$Regarding,For the time being, it's around $112 to $115, and it seems necessary to keep a close eye on whether there is lower price support. It seems safe to say that the benefits of the AI boom can still be expected in the medium to long term.
Created 6/25/24 Market Analyst Amelia
Source: Created by Bloomberg by Moomoo Securities
Source: Created by Bloomberg by Moomoo Securities
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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181546531 : Speaking of surprise, it was surprising; speaking of course, it was a natural price movement. But when they see that price movement, people who have them get excited, and people who don't have them want to buy it, but when they see that sharp drop, they're too scared to buy it. It's natural as a human mentality.
ミスターボインジャー : It fell to 115 dollars outside of hours, and since there was a rebound from there, it was exactly what Fibonacci thought.
A happy pocket money has been accrued.