High-Tech-tonic Pressure

In discussions about earthquakes, seismologists and geologists talk about
pressure between tectonic plates. When the pressure builds sufficiently,
something has to give way. The sudden release of pressure is what produces
earthquakes. When I look for setups, I look at areas of solid support or
resistance that appear on the verge of cracking due to extreme buying or
selling pressure.

The more solid the support or resistance, the better the power and velocity
of the break that occurs through it. That’s been my observation.

With today’s sharp reversal, you may be looking for stocks that have not
yet cracked to the downside, just in case a follow-through in the overall
market occurs tomorrow. I’m looking at Nvidia
(
NVDA |
Quote |
Chart |
News |
PowerRating)
.

The stock has been in a downtrend for the past three months.
Today, they dropkicked it, but by the close, it still hadn’t broken what I’d
consider to be the most solid area of support. This occurs right at the lows
of two crisscrossing trend channels and NVDA’s 50% retracement. Besides a
potential negative bias on overall market momentum, another factor that
suggests that NVDA may breakdown is the heavy volume. Selling NVDA was a very
popular activity today.

Have a great week,

Eddie