Nvidia Bollinger Bands

Hey everyone and thanks for jumping back Into the equity verse today we're going To talk about Nvidia and we're going to Be discussing its Bollinger Bands if you Guys like the content make sure you Subscribe to the channel give the video A thumbs up and also check out into the Crypto various premium at into the Cryptiverse.com let's go ahead and jump In so you know we don't typically Venture out too far from the Cryptographers sometimes we find Ourselves in the equity verse of the Macroverse or sometimes even in in the Precious metal verse right but I would Like to to cover more asset classes Beyond just crypto especially because we Know that everything is very cyclical Right there's this idea that you know Money flows from from one asset class to Another depending on if you're risk on Or risk off or if there's a lot of Liquidity if there's not a lot of Liquidity so I do want to be a little Bit more all-encompassing now recently Nvidia has had a fairly significant Rally to the extent that I think you Know it's surprised advised a lot of People uh even people who are bullish on It I imagine were somewhat surprised by Just how quickly it went up and you can See that it's currently coming in at Around 400 all right right now it's Around 398 11. uh but it's more or less

Around 400 and the high on Nvidia so far If you if you look over here on this Wick is is currently about 419.38 so that represents at least the Local high for NVIDIA now predicting When exactly these moves are going to Stop are of course anyone's guess okay And we're not I'm not really commenting On what it will be able to do you know Five years from now or 10 years from now But in the short term we do understand Of course that this move has been fairly Extravagant and I so I wanted to look at The Bollinger Bands to get an idea of How far above you know a a moving Average in terms of how like how many Standard deviations away from moving Average has Nvidia gone uh with this Recent move and then compare that to the Context of History all right so uh this Is the the website into the crypterious Premium we of course have stuff for Equities as well and and this is the Nvidia Bollinger Bands right so if You're not familiar with this with this Indicator here's a description of it but It's essentially defined by a set of Trend lines plotted usually two standard Deviations positively and negatively Away from a moving average of an assets Price right so the idea is you pick a Moving average and and then you can you The Bollinger Bands are just sort of Um the you know it could be two standard

Deviations away from the moving average That you're interested in so let's Suppose that you're not you're Interested in a weekly moving average Let's say you're interested in the 50-week moving average and you're Curious as to how many standard Deviations Nvidia is above its 50-week Moving average you can come over here so You can see the the the the Bollinger Bandwidth right now we're setting is two Standard deviations and so if the price Were to go to standard deviations above The 50-week SMA then that means it's Going to a level of one okay because We've set this the standard deviations To be two so these green lines here Represent two standard deviations from The 50-week moving average in both the Positive and the negative direction Right And you can see that there's been Periods before where we were above two Standard deviations Um you know more than two standard Deviations above the 50-week estimate And it did not stop the price from Continuing to rally and you can see that This time you know we've been above the Two standard deviations from the 50 week Estimate and the price has continued to Rally but because there has been a you Know Nvidia does show a history of going To standard deviations above its 50-week

Moving average why not plot it three Standard deviations and see what happens In that case right so if you go look at Say three standard deviations away from The 50-week moving average you'll get Something that looks like this right and So this does a better job of sort of Encapsulating price action for NVIDIA For the most part now it doesn't Completely because if you look back at The context of History the fact that it Goes above one would be an indication That it has historically gone more than Three standard deviations above the 50-week moving average additionally it's Also gone three standard deviations or More below the 50-week moving average Right you can see it did it in 2004 and Then it did it last in 2018. So using the Bollinger Bands and looking At say moves away from a longer term Moving average for an asset that you Think is going to stay in the test of Time it can be useful to understand Whether you're getting a good deal or a Bad deal right if you were to go back And look at periods where the prize for Say three standard deviations below the 50-week moving average like back over Here in 2004 the price of Nvidia at the Time was around 72 cents now that might Sting a little based on the current Price today but again what it shows you Is that it was relatively undervalued

Okay now again there are going to be Some instances where this doesn't mean a Thing for instance if a company goes Bankrupt it doesn't really matter you Know how many standard deviations below Certain prices I mean you can always get A reversion to the mean even during the Bankruptcy process even during the the Bankruptcy process but it doesn't mean That it has to ever go back up and put a New highs right so we have to remember That remember all these indicators all These indicators are basically tools That you can use but of course you also Want to to have you know a another a Fundamental understanding of of you know Is there a bull case for the asset or is There not okay so again like in in 2004 The Nvidia went three standard Deviations below its 50-week moving Average and it you know that was a great Price I mean again It ultimately was a Great price and then if you go look in 2018 you can see that it went three Standard deviations below 35 now in the Short term it bounced up and then came Back down and then went down all the way To around thirty two dollars but again In the grand scheme of things when you Look at at what ultimately happened Right it didn't really matter right like If you bought it at 35 you bought it 32 It didn't it didn't really matter now in The same way there are periods where it

Does go three standard deviations above Its 50 week SMA right Again looking at the context of History You can see that it happened in 2003 and In 2011 and then again in in 2015 and Then again in in 2021 and then here Again in 2021 and then it's currently Doing it again and so all I want to do Is is what happened during those times When it was three standard deviations Above the 50-week moving average and can We learn anything from it so one of Those times was back over here in 2003 The price of Nvidia was around two Dollars okay and it more or less hugged That level for you know for a month or So but then it ultimately did sort of Slowly fall back in uh you know by August of that year and you might not Think that that's a huge move but again The price went from two dollars to like One dollar right I mean that's still a 50 drop right it might not you know when You look at it on a chart like this it Might not necessarily you know seem like A whole lot because you know you know What came after it but again at the time People didn't know that right all they Knew is it went from two dollars all the Way down to 2 to less than one dollar Right two dollars down to less than one Dollar and what's interesting is that it Went above the three standard deviations Away from the 50 week estimate in 2003

And then it was only you know it was Only from so June of 2003 and then we Went three simulations below the 50-week Moving average by August of 2004. so About a year later about a year later Now could this happen again it could There are indications that the the Economy is slowing down we are seeing Slowing demand inflation still high I do Think because of high inflation it has Helped the bottom line of a lot of Companies but as we get into a more Disinflationary process what was ahead Or what was a Tailwind could quickly Become a headwind and so you could see An example where you know 14 months from Now when the hype has died down you Could see you could see some type of Reversion to the mean again in the short Term who knows right who really knows But that's what happened at least back In in 2003 and 2004. and it went from Above three standard deviations above The 50 week to three standard deviations Below and then we had another example in 2011 and and you can see that it didn't Actually go back to three standard Deviations below the 50 week but we can At least see what ultimately happened so You can see that in 2011 the Nvidia Price was around 541 and it was three More than three standard deviations Above the 50-week moving average it then Went to 563 and 589. all right so it's

Still slowly climbed that that wall of Worry if you want to call it that for a A some time and it peaked out in February of 2011. now by the time you Got to August of 2011 the price of Nvidia was back to 269. so again it Might not seem like much when you know What eventually happened but again this Is you know a 50 haircut on the price of Nvidia over the course over the course Of about half a year or so approximately Six months okay so again it didn't go Three standard deviations below the 50 Week that time but it did shave off About half of the evaluation and that Was in 2011. and then you have other Examples In in say you have an example here in 2014 where we went where Nvidia went Three standard deviations above the 50-week moving average and it went to a Price of around 4.40 Interestingly in this example you didn't Really see a massive correction right Instead the price of Nvidia just Basically went sideways and by going Sideways it allowed the 50-week moving Average to slowly catch up so the you Know it wasn't as extended from the 50-week moving average not because the Price had a severe correction but Because the 50 we caught up to where the Price ultimately was now if we just go

Through an exercise here right like had You sold at 444 You would have had opportunities to get In at a lower evaluation right I mean You know this was February 2014 by October so about eight months later or So the price was at 403 right so Technically you know it did shave off About about 40 50 cents or so in that Time period which I mean in terms of Percentage right like that is at least Something right you're talking about you Know at least a 10 Um uh removal from the price over the Course of around eight months or so but Again It ultimately just went sideways And so that was that was the example From from 2014. there's also another Example here in in um uh let me see if I Can find it so in here 20 2015 right so Let's zoom in over here to 2015 and Which or sorry yeah yeah 2015. what You'll see is that Nvidia did get above The 50-week moving average just like it Is now and it kind of climbed the wall Of worry for a while and then ultimately It did come back down and it did go Below the level that it that it was once Passed right so again like this is Another example it's more similar to the One we just looked at in 2011 where the Price did fall back in and and get Closer to the 50-week moving average and Technically it did go lower than where

It was when it got above three standard Deviations from the 50 week right so Again it crossed it here at 626 right it Crossed it here at 626 it continued to Slowly go up until around 8 24 and then Eventually it was at 6 16 about eight Months later or no not not eight months I almost see exactly when so this was From October 2015 until February 2016. So not even you're not not even half a Year right you're talking about it just Four months or so Um but it's interesting because in in Basically all of these scenarios the Price did technically go to a lower Level sometime within the next six to 12 Months some of the times it was because A a bear Market hit uh for the asset and It really shaved off 50 and then other Times it was more just a a mean Reversion where the the prize stayed Kind of constant with a slightly bearish Bias for the next six to 12 months until The 50 we caught up and then price Action resumed back up to the upside and Then there's of course two more examples That we can look at including the one Today and that's back in 2021 okay so in 2021 the the the question is is okay Well after it got three standard Deviations above its 50-week moving Average back in June of 2021 around 200 Did it go put in a lower price at some Point in the future and you can see that

It did I mean it was only a month or two Later Um about a month later that it ended up Falling back to around 180 or so and Then eventually of course it went much Lower down to around 112. then after it Did go lower right it fell back in below The 50-week moving or three standard Deviations from the 50-week moving Average we then saw another move up to The upside and then of course the rest Is history right from that point it came Down quite a bit Um we got you know from this level Around 333 we basically got a more than 50 correction it did not go 53 Center Divisions below the 50-week moving Average but it still was a fairly Significant correction showing Ultimately that every single time that The price of Nvidia reached three Standard deviations or more from the 50-week moving average we did eventually See a lower price some of the time it Was a much slower price like 50 percent Off and then other times it was a more Modest correction like 10 to 15 percent Over a longer period of time So I I did just want to go through this Exercise just to kind of see where we Are and then right now as you can see You know Nvidia crossed the you know This extent three standard deviations From the 50 week at around 380 and since

Then it's only continued to really go up Right so you know if 401 if we go take a Look at the price right now you can see It's currently coming in right around That 400 level okay what history shows Us is that it's possible that it could Push higher if it wants to but history Also shows us that at some point you Know in the next six to 12 months there Is a a high probability based on that Right not Financial advice no one knows What's going to happen right no one Knows that it you would see it fall back In and at least see some reversion to The mean which would allow the 50-week Moving average to catch up and if you if You take a look at the 50-week moving Average just for some context this is You know this is kind of what it looks Like in terms of uh where Nvidia Currently is right like so this is is More or less like an extension Mission From you know from the 50-week moving Average and you can you could look at Things like extensions from a 20-week Moving average as well right another way To visualize this would be to look at Say Um you know take the log of the price Over the 20-week moving average and and Kind of see where it where it stands in That regard and if you were to draw a Line across the page at this level You'll see that there are a few times in

History where it was this far extended Above the 20-week moving average and you Know back in 2011 which we talked about It even went higher than where it is Today and it did in in 2003 as well and If you were to go back to this chart And plot this say with respect to the 20-week moving average you'll see that There are times in history where it was More extended than three standard Deviations from the 20-week moving Average right like it's not even three Standard deviations from the 20-week Moving average at the current time if You were to change this to four standard Deviations from that level you can see That there was one time in history where It almost reached that and that was Again that was in 20 in 2014. when it Went up very very quickly and reached Four standard deviations from the 20-week moving average right now it's Not at that level it's not at the same Extension from the 20 week that it was Even at back in in November of 2021. Okay so again there's there's different Ways that you can look at this there's Different moving averages of course that You know that that you can use to look At this and so on and so forth so I Would encourage you to you know to look At this stuff again you can get access Um I mean you can you can look at Bollinger Bands on a lot of different on

A lot of different websites but if you Want to use this web website of course You can there's into the cryptographers Premium and we have it not only for of Course Nvidia but a lot of assets and The cool thing is you can actually look At at you know asset pairs that you Might not even think about right like You could even switch this over to be Like nvidia's valuation against say Um uh Bitcoin and and you know think About how crazy that would be to look at Right but there's there's really cool Things I think we can you know you can Do with this sort of stuff and um and Can give you an idea about how money Kind of flows from one asset to another From one asset class to another Depending on if your risk on risk off Depending on what the new narrative is Based on fundamentals and and just based On Um you know people wanting to chase Whatever they think the next new Narrative is going to be anyways if you Guys like the content make sure you Subscribe to the channel give the video A thumbs up and again check out into the Cryptoverse premium at into the Cryptiverse.com I'll see you guys next Time bye