Chart Advisor: Nvidia, Fed Minutes, PCE

By Jay Woods, CMT

Your Weekly Roadmap with Jay Woods, CMT

1/ Nvidia

2/ Fed Minutes

3/ PCE

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1/

Nvidia

This week could prove to be a huge test for the market’s recent rally. Stocks have quickly rebounded above most key technical levels and sit above thresholds held prior to April 2nd’s “Liberation Day”.

Last week’s stalled rally had investors focused on rising long term yields and the bond market. I discussed that and what could lift us higher with CNBC and Schwab TV. We will review price action in the S&P 500 later in the newsletter as that will always be a key focus from week to week.

However, this week is Nvidia Week. It’s never a good thing to focus on just one stock, but we all know there will be incessant chatter about Nvidia all week and it must be broken down. We also get a look into the discussion behind the Fed’s recent meeting when minutes are released Wednesday. Lastly, the Fed’s favorite data release in the PCE drops on Friday.

Let’s dive in…

Nvidia Earnings. The second biggest company in the world based on market cap as well as the poster child for all that is AI reports earnings on Wednesday afternoon. It’s so important that once again it gets its own section here.

While I tend to focus on price action, what three things will investors be watching and, more importantly, be listening for when they report?

Blackwell chip. Sales of the high end chip are supposed to contribute substantially to the firm’s bottom line. How is the rollout continuing? Are they meeting current demand and how does the future look? Have costs pressured profit margins in the short term.

Export Restrictions and China Sales. Government restrictions have limited Nvidia’s ability to export certain AI chips, like the H20, to China, potentially affecting revenue. While Nvidia has indicated a $5.5 billion charge related to these restrictions, the full impact on future sales remains a concern. Investors will look for guidance on how Nvidia plans to navigate these challenges, possibly through the development of new, compliant chip variants for the Chinese market.

Guidance. They have a history of upping projections for future earnings. Can this trend continue in the current environment or are there growth concerns given global competition and inflation concerns at home?

Nvidia The Technicals. Let’s look at historical and recent price action. It is fascinating to note the differences and potential inflection point we are experiencing.

On a daily basis…

We see promising signs of a recovery. Shares have broken the recent downtrend going back to the highs. They have recaptured the 50-day and 200-day moving averages while both averages remain pointed upwards. These are significant signs of strength.

However momentum indicators are flashing some warnings that upward price action may be slowing.

The RSI just broke below its overbought level of 70 and is in danger of breaking its own uptrend.

The MACD is precariously close to a sell signal after a huge rally.

Price action is also flagging nicely. These are normal retracements, but there is still work to be done to get to and push through to new highs.

On a weekly basis…

The longer term chart looks much more promising. The difference though is time. Shares have experienced sideways action before (green boxes). This is normal and constructive price action. I talked extensively about it on The Street’s Stocks and Markets Podcast.

Here we see a distinct low on a weekly basis with a huge bullish engulfing candle at its lows. Price has recaptured a key level in its 50-week moving average yet remains in the neutral band going back to early 2024.

Momentum indicators tell a different story though. Its longer term RSI just broke a recent uptrend and has crossed its 50 midline level. The MACD has given a strong buy signal with a bullish crossover.

Now the big question – will this be the time to push the stock to new highs and a fresh breakout? Will earnings be enough to push the price above that $150 level?

I would be surprised to see that occur regardless of how good their numbers may be. Daily price action is showing signs of a slowdown, while weekly is giving us optimistic signs of a new leg higher.

A common theme we have been seeing during this recovery phase has been strong stocks with solid earnings failing to make new highs. Look no further than Microsoft and Meta in the Mag 7 and Walmart and BJ Wholesale in staples. I struggle to see Nvidia being any different.

Watch price action on a rally. It’s likely to be faded and fail to close above $150. However price action to the downside looks like a great buying opportunity on both the near term and longer term time frames. Long term the stock may just need more time for that next leg higher.

2/

Fed Minutes

FOMC Minutes. Despite a vocal President pushing for lower rates, the Fed, as expected, kept rates unchanged last meeting. The vote was unanimous but this week we will get an idea of the tone and narrative of that meeting when the minutes are released on Wednesday.

Usually the minutes are a nothingburger, but lately they have been scrutinized more than ever.

The “data dependent” Fed continues to get hard data that shows an economy stabilizing with unchanging inflation and unemployment data. It is the fear of inflation rising and sentiment – soft data – at record levels that now keep the Fed at bay from cutting interest rates. While their fears are certainly understandable their narrative doesn’t match their past actions.

So what will it be going forward? Do they take it data point by data point which has been ok, or wait to move on rates due to the potential and real threats of inflation?

3/

PCE

Personal Consumption Expenditures (PCE) known as the Fed’s preferred inflation measurement is expected to remain stable at 2.6% year-over-year when released on Friday.

This number becomes more intriguing month by month as it remains stable. We’ve gotten past the point where there is mounting frustration that it hasn’t met the stated 2% goal and now many seem flustered that it remains so stable.

What was once considered sticky now has many of the pundits perplexed that it hasn’t risen given tariffs, trade wars and record low consumer sentiment. That’s what makes this week’s number so fascinating. Another number in-line or even lower than expectations puts the Fed in a precarious spot and the chorus to cut should grow louder.

Continue Reading on Freedom Capital Markets…

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Originally posted 27th May 2025