TIME TO TAKE SOME PROFITS ON NVIDIA (NVDA)

We have been short Nvidia (NVDA) with an average price of $25.53. At the time of entering the trade, we stated that the Quantitative Screen of the ZYX Change Method was showing the fair value of Nvidia to be $18. When the stock was just breaking $19 on March 10, 2011, we wrote, “The quantitative screen of the ZYX Change Method shows a fair value of Nvidia to be $18. However, our years of experience have taught us that in this case there is a high probability for Nvidia to overshoot to the $15-16 range.”

In our years of experience, it has been proven conclusively that no one, including us, can consistently call the exact points. Anyone claiming to be able to consistently call exact entry and exit points is either uttering falsehoods or grossly exaggerating. Our research has shown that the best way to maximize profits and lower risks is to work in terms of probabilities computed according to a rigorous analytical process such as the ZYX Change Method.

Nvidia closed yesterday at $17.62. At this juncture, our screens are showing only a 60% probability of Nvidia going down to $16, and there is only a 50% probability of Nvidia going down to $15. There is a 40% probability of a strong bounce.

Given the above probabilities, each investor should make a decision to take profits based on their own individual situation. The following are suggestions for those following the ZYX Change Method Trade Management guidelines:

â– Investors not able to watch the market during the day

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â– Conservative investors

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â– Aggressive investors

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â– Investors able to watch the market during the day

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â– Skilled traders

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For performance tracking purposes, we will maintain a tight trailing stop on half the position.