Public trading strategy
Nvidia's $1 trillion wipeout makes it cheaper than before AI existed — contraria
Thesis
News that Nvidia's next-gen server system is delayed has scared investors, sending the stock down roughly $1 trillion in value over two months. But this creates an opportunity: the company's valuation has fallen back to pre-AI boom levels despite bringing in record revenue. The market may have overreacted to the delay, as traders are already starting to buy the dip while the rest of the chip sector falls. A bounce-back play catches this overshoot.
Strategy approach
Build a mean-reversion strategy on NVDA using the D1 timeframe. Enter long when the stock's RSI(14) drops below 35 and the price is more than 15% below its 50-day simple moving average. Hold for a maximum of 15 trading days. Exit if the price closes above the 20-day EMA, and use an 8% stop loss.
Markets and timeframes
NVDAD1