Here's how you deal with Nvidia

Nvidia's stock price has recently declined after a gap-up on earnings, and the speaker suggests caution for long-term investors. While the stock could potentially rise above 150 and reach 200, he believes it is currently 'dead money' and advises against trading it. Investors are encouraged to define their exit strategy and avoid holding onto the stock indefinitely, waiting for a price recovery.

Nvidia Stock Performance

• 00:00:02 Nvidia's stock has not broken out above 150, which is considered a key level. The stock has fallen about 5% since its earnings gap-up, and its recent performance indicates it is in a state of distribution. The speaker warns against assuming it will automatically rise to higher levels.

Trading Recommendation

• 00:01:50 The speaker recommends avoiding trading Nvidia at this time, emphasizing that there are no clear trading opportunities. While he maintains a long position due to a low cost basis from earlier years, he suggests others should define a clear exit strategy or avoid the stock altogether.

Potential Future Price Movement

• 00:02:29 The speaker discusses the possibility of Nvidia stock eventually falling to its 200-day moving average, highlighting that this is a common occurrence for most stocks. While he's not making a prediction, he warns investors that the stock could potentially fall further than expected, possibly even to 100, reminding them of its recent history.

Importance of Stop-Loss Orders

• 00:04:10 The speaker strongly suggests setting stop-loss orders for investors who are holding Nvidia stock. He emphasizes that adhering to a predefined exit strategy helps prevent emotional decision-making, like holding onto a stock even when it continues to decline, hoping for a recovery.