US markets pull back; Nvidia in focus after earnings

Summary:

• US stocks to open lower after 3 days of gains

• Forthcoming session could be pivotal

• Nvidia beats watered down earnings forecast

It’s been a topsy turvy week for US stock markets, with Monday seeing a large decline before the subsequent 3 sessions recouped the losses. There has been official confirmation from the White House this afternoon that the auto tariff decision would be delayed by up to 180 days but this is simply official notice of what has been widely known since Wednesday afternoon and one of the reasons for the rally in the past couple of sessions. At the start of the final session of the week there is sense that the next 7 hours of trade could well be telling going forward with today’s price action set to dictate how we close on the week. Further gains and a close back above the 2900 mark would see a large bullish hammer printed on W1.

Alternatively, a close below 2850 would see a bearish engulfing confirmed on the Daily chart and suggest a rejection of the recent advance. An indication of the indecisive nature of the market at present can be found in the price pulling back to the 8 and 21 EMAs which themselves remain in a negative orientation. The 21 EMA (yellow line) capped Thursday’s advance and unless there’s a daily close above there then according to that metric the intermediate trend is still lower.

The S&P500 has pulled back to the 8 and 21 EMAs but they remain in a negative orientation. A possible head and shoulders is forming with the current gains potentially the right shoulder with the all-important neckline seen at 2802. Source: xStation

Nvidia could be an interesting stock to watch this afternoon with the firm surging on Thursday evening after reporting better than expected first quarter results. The chipmaker which was one of the big winners of the Crypto boom due to miners using its hardware posted an adjusted earnings per share of $0.88 on revenue of $2.22B. This was comfortably above the street forecasts for EPS of $0.81 and revenue of $2.19B.  "NVIDIA is back on an upward trajectory," said cofounder and CEO Jensen Huang. "We've returned to growth in gaming, with nearly 100 new GeForce Max-Q laptops shipping. And NVIDIA RTX has gained broad industry support, making ray tracing the standard for next-generation gaming." Despite rallying by as much as 5% after hours Nvidia is called to open pretty much flat this afternoon, back around the 160 mark.

Nvidia shares took off throughout 2017, helped in part by the chip-maker’s parts being used to mine Cryptocurrencies. Since then however the stock has fallen sharply and the market remains below its 200 day SMA. Source: xStation