Nvidia (NVDA) remains on the IBD Leaderboard list of top growth stocks despite facing increased pressure. However, its stock price has recently declined after a string of record highs and another earnings beat. Apple (AAPL) has surpassed Nvidia in terms of market capitalization weighting on the Nasdaq.
The decline is attributed to increased volatility and a recent pullback below its 21-day exponential moving average. This may raise concerns among investors that Nvidia is experiencing success at the cost of selling pressure, potentially becoming a poster child for the “secrets” of selling.
Nvidia’s earnings and sales growth have been remarkable, with 236% average earnings growth over the last three quarters. Analysts forecast 126% per-share earnings growth for the current fiscal year. However, the stock has already experienced significant price movements since its bottom in October 2022.
Its recent breakout was from a late-stage base, which entails more risk than earlier stages. The stock’s volatility has increased, with weekly price swings becoming wider and multiple drops below the 10-week moving average. A recent sell-off of over 4% in above-average volume highlights this trend.
Investors should note that those who initiated positions at the latest buy point may not have a profit cushion to protect them from potential further declines. Those who invested earlier and are sitting on large gains should monitor their position, including rules for buying stocks and selling stocks, such as scaling out of winners in phases.
As Nvidia’s stock price drops below its latest buy point but holds above its 50-day moving average, investors should reassess their own position and long-term objectives.
Source: https://www.investors.com/research/how-to-find-the-best-stocks-to-buy/nvidia-stock-sell-and-buy-rules