As Nvidia (NASDAQ: NVDA) stock experienced a remarkable surge in the past year, with its value soaring over 220%, traders began devising strategies that have proven highly profitable simply by monitoring specific technical indicators.
Namely, over the past two years, employing a strategy of purchasing when the stock price of NVDA reaches the lower Bollinger Band has proven to be highly effective.
This approach has demonstrated a favorable outcome, with a win rate of 73% and an average return of 6.04% per position.
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How does the NVDA Bollinger Band tactic work?
The entry criteria for this strategy involve initiating a purchase when the stock’s price hits the low of the day and is within 1% of the lower Bollinger Band.
As for the exit strategy, positions are closed when the stock price reaches a gain of 10% or incurs a loss of -5%.
“Entry: Low of day within 1% of lower Bollinger Band
Exit: +10% or -5%”
This approach is widely recognized as the Lower Bollinger Band strategy, which utilizes the Bollinger Bands indicator to pinpoint potential trading opportunities.
The strategy entails purchasing when the price of an asset dips below the lower Bollinger Band and selling when it surpasses the upper Bollinger Band.
NVDA stock price chart
Since the markets opened on April 5, NVDA stock has added 1.65% to its value, which contradicts the losses of 3.29% over the previous five trading sessions.
Since 2024 started NVDA stock has managed to rake in 81.40% gains, putting its price at the current valuation of $873.79.
While the NVDA tactic mentioned earlier may involve a longer-term approach, given its success rate and gains over this period, it could certainly be worth considering especially when taking into account Wall Street price targets for NVDA stock.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
