Nvidia's valuation hits pre-AI boom lows amid market panic — contrarian bounce p
Thesis
Geopolitical events like the US-Iran strikes often create indiscriminate panic selling that drags down even the strongest companies. News outlets report that despite the chaos and a broad market selloff, traders are actively betting on an Nvidia rebound. This resilience is underpinned by the fact that Nvidia's price relative to its actual earnings has dropped to multiyear lows even as the company continues to post record-breaking revenue. When a dominant market leader deflects broad market selling pressure and becomes historically cheap, it often presents a high-reward contrarian buying opportunity.
Strategy approach
Build a rule-based strategy that enters long NVDA on D1 when NVDA's 14-day RSI drops below 40 AND NVDA outperforms the SMH ETF by at least 1% on a day when the broader market (SPY) is down >1%. Use a 10% trailing stop and a 30-day max hold.