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Jun 04, 2023

ADI (+7.75%) vs NVDA(+26.79%) Swing Trading: Tech & Volatility Strategies Comparison

In the ever-changing landscape of the financial markets, the juxtaposition of different stocks and trading strategies can provide significant insights. We are focusing on two stocks, Analog Devices Inc. (ADI) and NVIDIA Corporation (NVDA), which interestingly share a strong correlation of 85%.

From a strategic standpoint, ADI aligns with a Swing Trader approach that invests in a diversified portfolio consisting of Hi-tech, Consumer, and Financial sectors. With a return of 7.75%, it shows a level of stability brought by this diversification. In contrast, NVDA aligns with a Swing Trader strategy that is volatility balanced. This approach focuses on technical analysis and effectively capitalizes on market volatility, as evidenced by an impressive return of 26.79%.

There's an intriguing dichotomy when comparing the Swing Trader Hi-tech strategy and the Swing trader Volatility Balanced Strategy. The former focuses on a longer-term horizon exploiting sector-specific trends, while the latter relies heavily on short-term price fluctuations, trading on volatility and technical indicators.

Moving on to price growth, both ADI and NVDA operate in the Semiconductors industry, which is experiencing a promising trend with average quarterly price growth of 16.55%. The weekly snapshot shows that ADI had a price change of +2.34%, outperforming NVDA, which had a price change of +0.98%, and also surpassing the industry's average weekly price growth of +0.71%. However, an in-depth analysis is required to ascertain whether this difference in price change reflects a longer-term trend or is a result of market anomalies.

A crucial factor that influences the trajectory of a stock's price is its earnings report. For the present fiscal year, ADI is set to report its earnings on August 23, 2023, while NVDA is due earlier on August 17, 2023. These dates could significantly impact stock prices, providing potential investment opportunities for discerning traders.

Summary: while both ADI and NVDA demonstrate compelling potential, the choice between the two will largely depend on an investor's risk tolerance and investment horizon. Given the nature of the Swing Trader Hi-tech strategy, ADI may be more suited for investors seeking a diversified portfolio with relatively lower volatility. Meanwhile, the Swing Trader Volatility Balanced Strategy employed by NVDA might be more attractive to those who can tolerate higher volatility and are keen to exploit short-term price fluctuations.

Related Ticker: NVDA

Aroon Indicator for NVDA shows an upward move is likely

NVDA's Aroon Indicator triggered a bullish signal on July 01, 2024. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 381 similar instances where the Aroon Indicator showed a similar pattern. In of the 381 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on July 08, 2024. You may want to consider a long position or call options on NVDA as a result. In of 80 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where NVDA advanced for three days, in of 374 cases, the price rose further within the following month. The odds of a continued upward trend are .

Bearish Trend Analysis

The 10-day RSI Indicator for NVDA moved out of overbought territory on June 21, 2024. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 50 similar instances where the indicator moved out of overbought territory. In of the 50 cases, the stock moved lower in the following days. This puts the odds of a move lower at .

The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 68 cases where NVDA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for NVDA turned negative on June 24, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at .

Following a 3-day decline, the stock is projected to fall further. Considering past instances where NVDA declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

NVDA broke above its upper Bollinger Band on July 10, 2024. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

Tickeron has a negative outlook on this ticker and predicts a further decline by more than 4.00% within the next month with a likelihood of 62%.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 60, placing this stock better than average.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. NVDA’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: NVDA's P/B Ratio (64.516) is very high in comparison to the industry average of (7.131). P/E Ratio (75.623) is within average values for comparable stocks, (59.887). Projected Growth (PEG Ratio) (1.468) is also within normal values, averaging (3.244). NVDA has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.018). P/S Ratio (40.323) is also within normal values, averaging (30.126).

Notable companies

The most notable companies in this group are NVIDIA Corp (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), QUALCOMM (NASDAQ:QCOM), Texas Instruments (NASDAQ:TXN), Applied Materials (NASDAQ:AMAT), Micron Technology (NASDAQ:MU), Intel Corp (NASDAQ:INTC), Lam Research Corp (NASDAQ:LRCX).

Industry description

The semiconductor industry manufacturers all chip-related products, including research and development. These chips are used in innumerable electronic devices, including computers, cell phones, smartphones, and GPSs. Intel Corporation, NVIDIA Corp., and Broadcomm are some of the prominent players in this industry. Semiconductor companies usually tend to do well during periods of healthy economic growth, thereby inducing further research and development in the industry – which in turn augurs well for productivity and growth in the economy. In the near future, demand for semiconductor products (and possibly innovation within the segment) should only expand further, with the proliferation of 5G, autonomous vehicles, IoT, and various AI-driven electronics set to herald a new, advanced chapter in the technology-driven world as we know it. With burgeoning prospects comes great competition. In 2015, SIA estimated that U.S. semiconductor industry ranks as the second most competitive U.S. industry out of 2882 U.S. industries designated manufacturers by the U.S. Census Bureau.

Market Cap

The average market capitalization across the Semiconductors Industry is 51.18B. The market cap for tickers in the group ranges from 13.43K to 3.18T. NVDA holds the highest valuation in this group at 3.18T. The lowest valued company is CYBL at 13.43K.

High and low price notable news

The average weekly price growth across all stocks in the Semiconductors Industry was 3%. For the same Industry, the average monthly price growth was 4%, and the average quarterly price growth was 28%. AEHR experienced the highest price growth at 40%, while ALMU experienced the biggest fall at -15%.

Volume

The average weekly volume growth across all stocks in the Semiconductors Industry was 9%. For the same stocks of the Industry, the average monthly volume growth was -14% and the average quarterly volume growth was -12%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 59
P/E Growth Rating: 46
Price Growth Rating: 50
SMR Rating: 70
Profit Risk Rating: 59
Seasonality Score: 5 (-100 ... +100)
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General Information

a manufacturer of computer graphics processors, chipsets, and related multimedia software

Industry Semiconductors

Profile
Fundamentals
Details
Industry
Semiconductors
Address
2788 San Tomas Expressway
Phone
+1 408 486-2000
Employees
29600
Web
https://www.nvidia.com
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