The Long Investor

$NVDA

Added 2025-01-27 11:44:04 +0000 UTC

$NVDA is taking the biggest hit in the PM because of DeepSeeks capability

The streamlined explanation is that DeepSeek does not need the excessive amount of GPU's that ChatGpt needs to power its AI function, so there is a concern that Capex spending will reduce if software like DeepSeek can carry out the same functions as Chatgpt but can do it a lot cheaper and without the need of expensive $NVDA chips that are likely in high demand.

However, I suspect it will take some time for this all to be confirmed and will not be confirmed in one session.

This has identified how reliant the Tech sector is one on company and its vulnerability that one relatively low cost company can wipe 100's of Billions of Market Cap out very quickly.

On the chart, the PM price action is down to the 0.5 Fib, this is certainly a change in formation and the Inverse Head and Shoulders can not be expected

That being said, a consolidation along the 0.5 Fib at $127 is no issue until the market finds its feet again and when earnings are out this week.

The 200 Day MA is also at the 0.618 Fib at $120, I would add at this point again to catch a relief bounce back up to $141 at the very least.