NVIDIA vs Intel

Now that Wall Street has accepted a Biden win, we’ll see more easing from the Fed and hopefully a great Santa Claus rally. That should be good news for stocks and for the ones in strong uptrends, it will be awesome! However for the ones in downtrends, well they get coal in their stockings. Here’s a tale of two worlds, NVIDIA’s performance vs Intel’s.

Machine Learning and Data Science in general requires big computers to do data processing. The CPU (central processing unit) chip has dominated the market for years with Intel (INTC) being the big winner in the space, until now. With the creation of the GPU (graphical processing unit) a whole new way of model building (and Bitcoin mining) has emerged. This has turned NVIDIA into a monster, and it looks like it’ll keep going for now.

Below is the daily chart for NVIDIA (NVDA), it’s on a tear recently but it looked like it final hit resistance. I used to generate this chart every so often, only to find no support or resistance lines. You can thank the US elections for taking the wind out of NVDA and now it looks like it’s forming a double top. It’s too early to tell if it will break through and keep going, or if the party is over.

*Note: Red is resistance, Green is support*

Intel (INTC), on the other hand has fallen on rough times. NVDA has a larger market cap that INTC and investors have punished it. I’ve been a long term DRIP holder of INTC and see no impetus to add more to my positions. I just collect dividends on a small investment.

*Note: Red is resistance, Green is support*

I guess this is what happens with stock market trends, sometimes your on top and other times you’re not. The markets have a long history of rewarding the innovative companies and punishing those that get left behind. It’s alot like evolution but faster and with money.

When in doubt, look at the price and charts. I don’t need to know every bit of news from NVDA or INTC, I just look at the charts and see which are going up and which ones are going down. They have all the market information priced in and that’s all you really need to know.

Semiconductor ETF

If you’re like me, you’ve stopped picking individual stocks and look more to spread your risk around. Betting it all or going ‘all in’ is a younger man(woman)’s game and I look toward growing my wealth in passive ways. One way to do this is to buy ETF’s of the industry or market sector you’re interested in.

The VanEck Vectors Semiconductor ETF (SMH) holds both NVDA and INTC, plus a bunch of others ones. It’s performance is outstanding and looking strong. You can see that beautiful doji pattern the day of the election and then gap ups over the top resistance line. Of course the markets can change on a dime but you trade or invest what you see at the time. Who knows what tomorrow will bring?

*Note: Red is resistance, Green is support*

For the records, I own no NVDA or SMH. Just a few shares in INTC. Bummer to me.

Update

I posted this review Friday morning on November 6th before the markets opened. They opened and prices for NVDA and SMH shot up on the impending news of a Biden victory. This morning (Monday November 9th) stock futures are through the roof and it’s looking positive for NVDA and SMH, not so much for INTC. This is all good news and it might look like the stock market will race higher. Here are the updated charts:

NVDA

*Note: Red is resistance, Green is support*

INTC

*Note: Red is resistance, Green is support*

SMH

*Note: Red is resistance, Green is support*

Learn Stock Trading, Investing, and Risk Management

There are a handful of financial and trading books that have made a HUGE impact on my investments. If you want to trade and learn about money and risk management then I suggest you get the Van Tharp book. If you want just focus on long term investing, get the Random Walk Down Wall Street book.

Hell, get them both. I owe my wealth to what I learned in those books.