Benzinga - by The Arora Report, Benzinga Contributor.
To gain an edge, this is what you need to know today.
Huang Speech Ahead Please click here for an enlarged version of the chart of NVIDIA Corp (NASDAQ: NVDA).
Note the following:
- This article is about the big picture, not an individual stock. The chart of NVDA stock is being used to illustrate the point.
- The chart shows the longest ever run in NVDA stock.
- The chart shows that lately NVDA stock has been volatile after it traced an outside day. In traditional technical analysis, an outside day is a reversal pattern.
- The chart shows an Arora signal to hedge was given at the top, right before the big drop. Members of The Arora Report have very large profits in NVDA as the stock was bought at an average of $125.51 in the buy zone shown on the chart. NVDA is trading at $902.16 as of this writing in the premarket, representing a profit of 619% in 17 months.
- RSI on the chart shows the NVDA is no longer technically overbought and can go either way.
- Expect the crowd to continue to buy NVDA as long as the trendline shown on the chart holds.
- NVDA has now become the most popular stock for call option buyers, replacing Tesla Inc (NASDAQ: TSLA). Call options are bullish bets.
- As we previously shared with you, Nvidia’s annual AI conference is starting today.
- Since the stock market has been driven by the AI frenzy and NVDA stock has been the leader, the Nvidia conference is a very important event for the stock market.
- Most important is Nvidia CEO Jensen Huang’s speech this afternoon.
- Expectations are running extremely high.
- Investors are eagerly awaiting Huang’s vision for artificial intelligence.
- Investors are also awaiting developments on the next AI chip from Nvidia that will replace H100.
- In an incredible turn of events, Jensen Huang has become more important for the stock market than Fed Chair Jerome Powell.
- Apple Inc (NASDAQ: AAPL) has fallen behind in AI. Now, Apple is trying to catch up by licensing Google’s Gemini and negotiating with Google to incorporate Gemini into the iPhone.
- In The Arora Report analysis, such a move will bring regulator scrutiny.
- In The early trade, excitement over Nvidia’s AI event is driving aggressive momo crowd buying in stocks.
In the early trade, money flows are negative in Microsoft Corp (NASDAQ: MSFT).
In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (ARCA:SPY) and Invesco QQQ Trust Series 1 (NASDAQ: QQQ).
Momo Crowd And Smart Money In Stocks The momo crowd is aggressively buying stocks in the early trade. Smart money is inactive in the early trade.
Gold The momo crowd is buying gold in the early trade. Smart money is inactive in the early trade.
For longer-term, please see gold and silver ratings.
The most popular ETF for gold is SPDR Gold Trust (ARCA:GLD). The most popular ETF for silver is iShares Silver Trust (ARCA:SLV).
Oil The momo crowd is buying oil in the early trade. Smart money is inactive in the early trade.
For longer-term, please see oil ratings.
The most popular ETF for oil is United States Oil ETF (ARCA:USO).
BitcoinBitcoin (CRYPTO: BTC) is range bound.
Protection Band And What To Do Now It is important for investors to look ahead and not in the rearview mirror.
Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.
You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.
It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.
Traditional 60/40 Portfolio Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.
Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of seven year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.
The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
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