NVDA strong earnings and backlog support upward momentum; technical setup favors continued gains.

Guys, what an amazing day and follow through we just experienced with Nvidia. Nvidia hasn't done this in quite a while as far as usually it's a sell the news type of event with their earnings, but they did actually post fantastic earnings and claim to have over a $2 trillion backlog now.

So, you know what the only thing holding Nvidia back is? Apparently themselves because they've got a lot of orders on the books waiting to get fulfilled and they don't have enough chips to sell. So, Nvidia's marching up.

Now, we did have a big catalyst with the Nvidia earnings.

Next up, guys, big time as far as earnings. Look at Nvidia. We did pull all the way down here beforehand. Now, let me remind you, too, breakouts retraces. One of the most reliable, playable opportunities in the stock market, something that can be notified and identified by one trend line, guys.

Now, what threw us a little bit of a curveball recently was that Nvidia was hitting this trend line.

So, most recently we put in a high here in video on May 14th. Drawing these breakout trend lines is so simple, folks. Just take this trend line from the high pivot, draw it down to the next major pivot that occurs on the chart, extend that all the way down on the chart, and as you notice, we had a nice breakout that occurred here August 5th, and since then extended away from that trend line, allowing this trend line to become support for anytime price could come back in and retest it.

Now, notice we hit it and closed underneath it on Monday. We didn't have any other further extending moves. Matter of fact, the following day, Tuesday, closed above, and then into earnings where investors were trimming in case of a bad report or more or less a bad reaction.

We knew Nvidia was going to have good earnings. It just was Was it going to be good enough to satisfy the analyst expectations?

And we can see today, we clearly had that occur, but we had inside as to what was going to happen, too. We were in the middle of this big move up and big move down. So, in that regard, without this breakout retrace at play, you would kind of say, "You know what?

It's a 50/50 shot if it's going to go up or go down." But this breakout retrace play increased probabilities of that bounce, and bounce is what occurred right here on the chart.

You can see near-term resistance on Nvidia up here at $231.18. Clear that, folks. We're not only talking about retesting all-time highs, we might be talking about making new ones as the new resistance beyond all-time highs will be the 50% area of this longer inclining parallel channel at the charts, right around $240.