History Says Nvidia's Weekly Losing Streak Could Continue

NVDA shares tend to wilt in June and July

by Andrea Kramer

Published on May 31, 2019 at 11:07 AM
Updated on Jun 5, 2019 at 11:07 AM

It's been a rough month for the stock market, with chip stocks hit particularly hard amid the escalating U.S.-China trade war. NVIDIA Corporation (NASDAQ:NVDA) stock is no exception, on pace to end its fourth straight week in the red, and set for its steepest monthly slide since the October sell-off. What's more, NVDA's technical woes could continue this summer, if recent history is any indicator.

NVDA is set to end May with a loss of more than 23%, and is pacing for a seventh straight day in the red, down 1.2% to trade at $137.47. The equity started 2019 strong, but ultimately ran into a roadblock in the $190-$200 region, which is where the shares were trading before a mid-November bear gap. This neighborhood also represents a 38.2% Fibonacci retracement of NVDA's drop from its October highs to its late-December lows.

NVDA stock chart may 31

Since early April, Nvidia shares have finished just one week higher. That trend could continue, too, if past is prologue. According to data from Schaeffer's Quantitative Analyst Chris Prybal, NVDA has averaged a loss in the 22nd through 28th weeks of the year, which equates to roughly June through mid-July. In fact, in this time frame, NVDA has averaged a total loss of 10.9%, making it among the worst S&P 500 stocks to own during this stretch, historically.

spx stocks summer weekly avg returns

Despite the semiconductor concern's problems both on and off the charts, analysts remain devoted. Nvidia still boasts 18 "buy" or better endorsements, compared to just eight "holds" and two "sell" or worse ratings. Plus, the consensus 12-month price target of $183.42 represents a premium of nearly 33% to the equity's current price. This lingering optimism leaves NVDA vulnerable to analyst downgrades and price-target cuts, which could put even more pressure on the shares.

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