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Nvidia (NVDA) shares wiped out more than $220 billion in value on Tuesday as the stock pulled back following CEO Jensen Huang's CES keynote. Freedom Capital Markets chief global strategist Jay Woods joins Seana Smith and Brad Smith to examine the technical analysis of the stock.
"When you watch this stock, you have to put it into perspective," Woods explains. "Near term, there are some headwinds right now and it doesn't look good. But you want to put it in perspective: We were up 185% over one year ... the year before, up 240%. We've had three 20% drawdowns in the last year."
The strategist explains his concerns. "We have what we call a 'key reversal day' where we gapped up. It looked like the stock was breaking out, and it opened at the high. It failed to close at the low," Woods says. He also notes, "Nothing has fundamentally changed, but technically, [based on] what traders are watching, we had a false breakout."
"That gets people nervous because it's the most important stock in the world, but when you put it in perspective, we've had a heck of a run. We're still consolidating. We're still flagging [the] false breakout. We'll probably hang out in this area for a little while, so it's an opportunity," he says.
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This post was written by Naomi Buchanan.