To add to my reply, NVDA is currently trading right on the yellow uptrend line so needs to either SOLIDLY take that out intraday or print a solid daily close below it for the next objective entry or add-on to the objective short entry on Friday’s BEC.

NVDA was covered in the video in this post. The Bearish engulfing candlestick I covered in the video was finalized at the close on Friday so that provided an objective short entry with a stop above Friday’s high.

To reiterate, bearish engulfing candlesticks are potential topping/reversal candles. Therefore, while it will either play out or not as with any trade, this is the kind of trade that one can take, set the stop above the BEC & let it ride for the time being as a true trend reversal (from bullish to bearish would mean months of downside for NVDA measured well into the double digits.

Depends but if we get the sell signals on the top sectors of the SPX & majority of the big tech stocks (yellow lines) that I’m watching for, it could be a double-whammy for SMCI:

All the hot-air (big run up) from riding NVDA’s coattails PLUS all the buying since the upcoming SPX inclusion was announced could see the stock fall very fast if the flows into the index reverse. A big IF but if so, you’d have the forced selling from the index funds (to meet net redemptions) as the market falls coupled with selling from individuals & institutions that are long the stock plus all the stop-losses getting hit plus forced margin call selling, if the market drops enough.

All about the flows so if the trend reverses AND how hard the market falls will determine how far & fast SMCI falls during the next downtrend.