Cycle Trading

Pre-Summary

Two weeks ago, we examined NVDA after it had declined nearly 20% from its recent high and found support at the 200-day moving average. Since then, the stock has repeatedly tested resistance at the declining 10-day moving average while holding above the 200-day moving average. Tuesday’s close above the 10-day moving average is the first meaningful improvement, but additional strength will be needed before the Daily Cycle Low is signaled.

On June 30, we looked at NVDA after the stock had declined nearly 20% from its recent high. At that time, NVDA had printed its lowest point on June 29, found support at the 200-day moving average, and formed a swing low. However, the stock remained below the declining 10-day moving average, leaving the Daily Cycle Low unconfirmed.

Since then, NVDA has continued to hold support at the 200-day moving average while repeatedly testing resistance at the 10-day moving average. Each attempt stalled below the moving average until Tuesday, when buyers finally pushed price back above it.

What is clear is that NVDA has taken an important first step toward signaling a new Daily Cycle Low.

This signals improving short-term momentum. However, bullish follow-through will still be needed before we label June 29 as the Daily Cycle Low.

It is equally important to separate the daily cycle from the daily trend. Although the cycle is attempting to turn higher, NVDA remains in a daily downtrend. That daily downtrend will remain intact until price closes above the upper daily cycle band.

Conversely, a close back below the 200-day moving average would indicate a continuation of the daily downtrend and signal a cycle band sell signal.

The coming sessions should provide the evidence needed to determine whether NVDA is beginning a new daily cycle or simply pausing before another move lower.

Current Framework

Trend: Daily downtrend.

Cycle: June 29 attempting to signal the Daily Cycle Low.

Next Trigger: Bullish follow-through above the 10-day moving average labels June 29 as the DCL. A close below the 200-day moving average signals continuation of the daily downtrend.