The NVIDIA market has struggled a bit recently, as traders are starting to question a lot of arrangements in the AI space.
NVIDIA
The NVIDIA market has been a bit hesitant to say the least during the trading session on Tuesday so far but when you look at the longer-term outlook it's been sideways and with that being the case I think range bound trading continues to be the way forward.
We're not quite oversold according to the stochastic oscillator so I find it very interesting if we drop to the $170 area because that's where the 200-day EMA is. If we get the stochastic crossing over in an oversold condition, I'd be very interested in that.
NVIDIA is struggling at the hands of math. We are starting to see reports that NVIDIA is pumping money into OpenAI so that they can rent big huge data centers and try to put together the idea of renting these massive data centers that then the money goes to Oracle but sometimes Oracle gives the money to OpenAI and such and we're seeing this convoluted swirl of money changing hands in the artificial intelligence sector but the reality is everybody's losing money.
THE CONVOLUTED SWIRL OF THE AI SECTOR
NVIDIA has a perfectly viable business outside of artificial intelligence, but it is part of what we've seen in the explosion over the last couple of years. It wasn't that long ago that NVIDIA was trading at $25 a share.
Because of this I think someday a lot of these stocks will collapse. I also think they become generational buying opportunities because artificial intelligence will be a thing but we're going through the growing pains and right now people are starting to look at this sector a little bit more cautiously.
In the meantime I have to assume that the market is going to continue to do what the market's been doing and as a result I am looking to buy the dip but we need to see the $170 level hold as support maybe the stochastic oscillator to bounce and perhaps a little bit of a bounce with price as well sets up a nice trading opportunity to the upside.
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