Stock Price Action: Unique Trends in TSLA, NVDA, and Walmart
Buying a stock (also called a share or equity) means someone is purchasing a small piece of ownership in a single, publicly-traded company. The buyer becomes a part-owner, or shareholder.
The profit is in two main ways: capital appreciation (if the stock price goes up and is sold) and potentially through dividends (a share of the company's profits paid out to shareholders). The investment has a 1-to-1 relationship with the company's performance.
Ownership: Direct ownership in the company, which usually includes voting rights on corporate matters.
Leverage: None. The potential loss is limited to the initial investment.
Risk: The investment is tied entirely to the success or failure of that one company.
Best For: Investors who believe in the fundamental strength of a specific company, and traders of all styles (position, swing, day) who base their decisions on technical analysis across various timeframes (monthly, weekly, daily, hourly, minutes).
Every stock has its own personality. Even within a strong bull market, some individual stocks can get punished while others become overextended.
The chart below, which uses a logarithmic scale, perfectly illustrates this by comparing three different stocks. It highlights the euphoric rally in $Tesla Motors(TSLA)$ during 2020-2021, which was followed by a significant decline. It also shows the major run $NVIDIA(NVDA)$ experienced in 2023 and 2024. On the other hand, a less volatile stock like $Wal-Mart(WMT)$ also had a significant bull run during the same period, but with much lower volatility.
The point is that price action is unique to every stock. While the fundamental context drives the long-term price, technical analysis helps us time potential bullish and bearish reversals.
This is why "marrying" a single stock has both benefits and significant costs. A healthier approach is to analyze a diverse set of securities, hence the diverse set of stocks analyzed in this publication including Indices, Stocks, Commodities, Bitcoin, Bonds, and the volatility itself. This allows traders and investors to monitor the market for the best risk/reward opportunities while avoiding the individual stock blow-ups that can happen at any time.
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
