NVDA Stock: Nvidia (NVDA) has proven itself a true market leader with a remarkable 43% surge in just four weeks, driven by a classic base-on-base chart pattern. The surge followed a breakout from a flat base that formed after an initial cup-with-handle base, showcasing Nvidia’s resilience and market dominance. This surge capped off an exceptional year for the company, which recently joined the Dow Jones Industrial Average, replacing Intel (INTC) in a significant move that further highlights Nvidia’s ascent in the world of artificial intelligence (AI).
Nvidia’s 43% Surge: A Classic Bullish Chart Pattern
Nvidia’s explosive 43% gain in late 2021 is a textbook example of the base-on-base pattern, one of the most bullish formations in technical analysis. This pattern occurs when a stock consolidates in two bases—one followed by a second base that forms just above the first. The second base creates a stair-step effect, with the buy point occurring at the top of this formation, signaling pent-up demand and institutional buying.
Nvidia’s run-up began in May 2021 when it surged for seven straight weeks. The stock paused and formed a short cup-with-handle base, setting a buy point of 207.33. After breaking out in August, the stock rose 11%, before consolidating again and forming a six-week flat base. This second base, which met the requirements of a base-on-base pattern, led to another breakout in late October, propelling Nvidia to new highs and marking a 43% increase by mid-November.
Nvidia Joins the Dow Jones: A Symbol of AI Dominance
In a milestone for the company, Nvidia became a member of the Dow Jones Industrial Average on Friday, cementing its position as a dominant force in the technology sector. Nvidia replaced Intel, which has seen its stock fall nearly 50% this year. The move reflects Nvidia’s growing role as a leader in AI technology, with its cutting-edge graphics processing units (GPUs) driving the booming AI industry.
Since the beginning of the year, Nvidia’s stock has tripled, propelled by an insatiable demand for its AI chips, including the next-generation Blackwell GPUs. This surge has made Nvidia the world’s most valuable publicly traded company, surpassing Microsoft and Apple.
Nvidia vs. Intel: A Tale of Two Tech Giants
While Nvidia has soared, Intel has struggled with a costly turnaround under CEO Pat Gelsinger. Intel’s stock is down almost 50% in 2024, highlighting the challenges the company faces in a rapidly changing tech landscape. In contrast, Nvidia’s inclusion in the Dow Jones and its meteoric rise underscores its success in capturing the AI market.
Sherwin-Williams Also Joins the Dow
In addition to Nvidia, Sherwin-Williams (SHW), the paint-maker, also became a new member of the Dow Jones on Friday, replacing Dow Chemical (DOW). Sherwin-Williams has risen 23% this year, further emphasizing the dynamic changes within the Dow.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Please consult a qualified financial advisor or conduct your own research before making investment decisions.
