It's NVDA Wednesday!

Good Wednesday Morning, MPTraders!  May 28, 2025-- Pre-Market Update:  It's NVDA Wednesday!  The final member of the Mag 7 reports after the close...

All eyes and ears will be focused on the NVDA Earnings. Investors and traders want to know:

-- About future expectations for gross margins and revenue growth...

-- CEO Huang's plan for NVDA's future relationship with China, and prospects of supplying chips that are "Trump Administration Compliant" ...

-- Prospects for sales to the UAE and Saudi Arabia, and what that implies about Cap-Ex commitments that will drive sales of NVDA chips...

-- CEO Huang's estimate of sales and revenue guidance for the next two years... 

Technically, our discussion from yesterday morning remains unchanged:

If my near and intermediate-term technical work is telling me anything about the directional reaction to the news, then NVDA should remain above 126 support (-6.7% from current levels) on any initial knee-jerk negative response, and on the upside, a positive response projects to 142-145 (+65% from current levels) and in the case of a bullish surprise, to 161-164 (+20% from current levels)... Last is 134.74...

Fast-forward to this AM, we see NVDA is trading at 136.60/70 (nearly $2 above where it was trading at the time of yesterday's update), and importantly, pushing up against its consequential January-May resistance line (see my attached 4-hour chart) that cuts across the price axis in the vicinity of 136.80. A sustained climb above key resistance from 136.80 to last week's high at 137.40 will trigger a run at my next upside target zone of 142 to 145 (+4%-6% above current levels)... 

Only a very disappointing Earnings report or Huang conference call that triggers a bout of weakness that nosedives NVDA beneath critical support at 127.45/80 will inflict serious technical damage to the April-May advance... Last in NVDA in pre-market trading is 136.59... (continued below my NVDA chart)...

AMD-- I am also keeping an eye on AMD's reaction to the NVDA news. My technical setup work argues that during the past four months, AMD has carved out a potentially meaningful bottom formation in the aftermath of a relentless 66% bear market from March 2024 to April 2025 (see my attached 4-hour chart) that I consider AMD's adjustment and regrouping phase in a technology world taken by storm by mighty NVDA.  The four-month bottom and an AMD pattern poised for an upside breakout suggest that AMD is on the verge of playing catch-up to NVDA. A climb into and through heavy resistance from 120.50 to 132.00 will unleash powerful bullish potential, reaching 155-160 and possibly 175-180 in the weeks and months ahead.

From what I have been reading, the AI and machine learning industry emphasis is shifting from training AI models to inference (using trained models to make predictions or decisions). This shift is expected to significantly increase demand for AMD's semiconductor chips, particularly those suited for inference tasks (from GROK).

AMD's stock price could make outsized gains from tailwinds from NVDA in general, and also from a shift in demand to "inference chips."

That said, patience will be necessary. My attached NVDA/AMD Ratio Chart continues to show NVDA outperforming AMD for the past 16 months, however, while all of 2025 the ratio has remained above the dominant uptrend, the pattern carved out from January through May has a "toppy look and feel" to it that suggests AMD upside momentum will overtake NVDA in the upcoming weeks and months...