Chart of the Day - Monday, November 13, 2023

Today’s Chart of the Day was shared by Arun Chopra (@FusionptCapital). Nividia ($NVDA) has risen for nine consecutive days now. It's flirting with record highs again after correcting about -18% from its August peak. It's currently up more than +232% YTD, making it the best-performing stock in the S&P 500. At the end of October, Many pointed out that $NVDA had formed a Head & Shoulders top. From a structural perspective, this was a textbook H&S pattern. However, the outcome was anything but textbook. According to conventional wisdom, breaking the neckline at $400 should've led to a ~20% decline (using a measured move from the pattern's height). The stock indeed violated the neckline two weeks ago, but it hasn't closed lower since. This was one of the most well-broadcast patterns we've seen in a while. Everyone and their priest saw it! Patterns often fail when too many anticipate them. Remember, it's often bullish when bearish patterns fail.