Nvidia could be stuck for months, says Renaissance Macro chair

Nvidia ‘s long rally could be giving way to a consolidation period that lasts for months, according to Renaissance Macro Research chairman Jeff DeGraaf. “I think we’re stalled here for Nvidia,” DeGraaf said Monday on CNBC’s “Money Movers .” Nvidia slumped on Friday and was down slightly again on Monday, but the stock is still up about 75% year to date. That’s on top of a more than 200% advance in 2023. NVDA YTD mountain Nvidia’s stock is up sharply yaer to date. The chipmaker is also one of the most heavily traded stocks on the market, with derivative trades like options or the GraniteShares 2x Long Nvidia Daily ETF (NVDL) also seeing heavy activity. This combination of a big rally plus elevated trading activity suggests that the stock is overheated, according to DeGraaf. “Don’t chase it here. The expectations are so high that when we get this combination of momentum and the option activity, it really is a sign that things are priced to perfection and very unlikely to move in the direction of the bulls in the near term,” DeGraaf said. DeGraaf said Nvidia could consolidate in a range from roughly $750, near where its 50-day moving average will soon be, to $950. The stock was trading near the $870 level on Monday. This period could take three to six months, DeGraaf said, and he compared it to a brief slump Nvidia had last summer. “It’s not really a bearish outcome unless you’re a very short-term trader. But it does result in this kind of elongated consolidation where that enthusiasm just burns off,” DeGraaf said. To be sure, others who are more bullish on Nvidia have pointed out that the stock isn’t terribly expensive on the basis of it price-to-earnings valuation because earnings estimates have risen along with the stock price.