NVIDIA, the dollar and CMB

Yesterday I wrote NVIDIA gained another 2.81% and today the rally continued. NVDA has gained $1.02 (+4.74%) today and went up 11.76% in the last five days – a pretty nice rally on a high volume. More than 28.28 million shares were traded today, that’s 50% more than usual and a good sign. The stock has dropped a lot since its peak in October 2007 but things are starting to look bullish again. NVDA seems to have hit a double bottom and has broken through the resistance around $21 this week.

I don’t have a glass ball but I wouldn’t be surprised to see NVDA much higher next week as I expect the Q1 earnings will be pretty good. Last time NVDA announced its earnings the stock went up a lot in the afterhours but dropped like a rock the day after the conference call as analyst feared costs margins were under pressure. IMO this stock has been punished too much on ungrounded fears and unless the earning results or guidance are bad and/or if a lot of bad economic data follows I think it will soon be in the high $20s again.

The dollar
Another positive thing is that the US dollar gained some strength this week. Last week the exchange rate went over $1.60 per euro for a brief moment but now it has fallen back to $1.54 per euro on better than expected economic data and belief that the Fed will stop cutting the interest rate. Later this year the difference in interest between the US and Europe will likely drop as the ECB is expected to cut the interest rate and that should further fuel the recovery of the USD.

Another stock I’ve invested some money in is CMB, a Belgian ship-owner. This firm’s core business is the transport of dry bulk goods, especially coal. I read a report about this firm in a magazine a couple of months ago and was attracted because of its very high dividend yield. After following the stock for a couple of weeks I bought some shares and looking back it seems I fished it up very close to the bottom .

The Baltic Dry Index (BDI) shipping rates and the dollar are going up again and CMB rose 4.98% today! Since I’ve bought this stock about five weeks ago I’ve gained almost 12.5% and within two weeks CMB pays out its yearly dividend. At the price I bought the shares I’ve got a net dividend of 7.2%! Just the dividend alone from this company earns me a lot more than a high interest savings account but there’s a lot more risk involved with stocks of course.

Trading and investing in stocks is sometimes frustrating (when they go down lol) but it’s a pretty interesting hobby.


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