Look Ahead 23/8/23: NVIDIA Q2 earnings

(Video Trancript)

Is investment in crude sector insufficient?

Welcome. It is time now to take a Look Ahead to some of the tradable activities on Wednesday, 23 August 2023. We begin with some purchasing managers' index (PMI) data out across the Euro Zone; the UK and the US, as well, contributing to a full picture of manufacturing and services PMI data out in the Western world.

This data will give us a better idea as to how manufacturing purchasing managers and senior management feel about the outlet for the remainder of the year.

And later on, we get the US Energy Information Administration (EIA) crude oil inventories. There have been some interesting drawdowns recently. There's been a lot of movement within this area of the markets, and we've got a lot of concerns about the fact that there's not enough investment going in.

China could face a demand drought

At the same time, we've got demand looking as though it could well continue to dry up across China, as China doesn't perform as many had been expecting. Let's take a look at this long-term chart in the daily chart form and get a better idea as to potentially how to trade this.

Now, we've seen this bouncing off this line of support at 78.54. In the back end of last week, it was Wednesday and Thursday, we touched that pretty much twice.

We had previously used that as a point of interest back on 3 August, but you can see here around about the close on 24 July, and in this area down here of 78.54 is a really interesting area for the market to focus in on.

Now, we're on the way down. We've got the moving average convergence/divergence (MACD) pointing down, indicating the momentum is looking like it could well continue to fall away. And in that sort of situation, one would look at an opportunity here to sell this market.

The only thing I'd say is, we get this crossover of these two moving averages here. Now, that is potentially looking like it could well be a good crossover in as much as we've got the 50-period moving above the 200-period moving average, which is a golden cross.

Now, that has upside potential. Now, if you see upside from here, and you want to trade the long trade at $79.82, your stock goes underneath the underside here at around about the $78 dollar level.

If you think that there's potential on the downside, because momentum is picking up on the downside, your stock goes above yesterday's candle, around about the $82.50 level. If you want a short trade, your price target would be $78.54. The EIA crude oil inventory data is out at 3.30pm on Wednesday.

NVIDIA numbers out

So I think for me, one of the big events on Wednesday is almost certainly going to be after the bell in the evening where we get NVIDIA on its second-quarter numbers.

You remember the first-quarter figures coming through where we had a stunning upside, and you can see it demonstrated in the weekly chart. If you look at the daily chart, I want to show you the moves that we've had since the beginning of the year.

Now, bearing in mind, it was lower than that back in October last year. So even though from the beginning of this year, to the highs that we've had on 14 July, up 240%.

Now the last time it produced quarterly earnings, we saw this market move up, and this was the point here where we saw that big candle up to new record highs. You can see it stormed through the previous record high at $346. Here we are now, looking as though all sessions on the IT platform, we want to pass into new record highs again.

We're currently trading at $477.55 with those earnings out after the bell tomorrow night, and it's going to be an interest, I think, not just in the tech sector for NVIDIA, but if we look at some of the other companies as well, we've got numbers out as well from Snowflake on the second-quarter figures.

We've got Peloton Interactive on fourth-quarter numbers; also the sportswear apparel maker and retailer Footlocker out with its second-quarter figures. So some other companies to look at, but for me, NVIDIA is going to be the most interesting one to follow after the bell on Wednesday, 23 August 2023.

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