It was a rough week for Nvidia Corporation (NASDAQ: NVDA), one of the top performing issues in the S&P 500 index in 2016. Last year, the issue ran up 224 percent from its 2015 year-end close ($32.96) to $106.74.
Bad Week
Per its 2016 style, the issue began last week with a nearly $4 gain, rallying from it's previous close ($107.23) to $111.07. After maintaining that level on Wednesday, all hell broke loose after the close.
That's when Nomura downgraded the stock from Buy to Reduce and announced a $90 price target, well below its closing price of $110.76. Aggressive short sellers and others that were long the issue hit the exit button.
In thin after-hours trading, the issue declined from $110.76 to $108.30 by the conclusion of after-hours trading at the 8:00 p.m. EST.
That was just the tip of the iceberg.
Before Thursday's open, BMO Capital downgraded the stock from Market Perform to Underperform with an $85 target. Although these are respected Wall Street firms, they certainly don't carry the same weight with their ratings as a Goldman Sachs, JP Morgan or Bank Of America.
In fact, PreMarket Prep co-host Dennis Dick said on the show he was amazed on how these mid-tier Wall Street firms could have such an impact on as heavily traded issue as Nvidia. He couldn't recall a bigger move in either direction with the catalyst being a double upgrade or downgrade from Wall Street analysts.
See Also: As Nvidia Catches A Pair Of Downgrades, Attention Turns To AMD
Share Movement
Short-sellers seized on the negative news and had Nvidia trading lower by nearly $5.00 in the $105.00 handle by Thursday's open. When the buy the dippers nudged the issue to no further than $106.39, the floodgates opened and panic-selling ensued.
It was able to find intra-day support at $99.68 and managed to close in triple digits at $100.49. The combination of S&P 500 index futures opening deep into the red and another round of sellers attempting to lock in profits instigated a nosedive off Friday's open.
The selling crescendo ended in the first minute of the session, when it bottomed at $95.70 and began to rebound. That low is below its December 15 low ($96.60), but well above its December 14 low ($91.57).
As the rebound rally was in motion, it was aided by a tweet from well-known short seller, Andrew Left of Citron Research, who disclosed he had covered his short position. That put the Nvidia bulls back in control for the interim and the issue continued to make new highs for the session, closing the week at $101.46.
Not all of Wall Street has turned sour on the issue.