A New And Exciting Chart Technique Set To Revolutionise Quentinvest

We are at an early stage of learning how to manipulate charts (by coding behind the scenes on the chart services) to learn more about what is happening. The charts above display a phenomenon known to chartists as the bunching of the moving averages. It can give important signals.

It reminds me of Brian Co’s programmes about the universe’s origins. Matter (most likely dark matter) formed gigantic filaments in the unimaginable reaches of space. Where these filaments crossed gravity caused matter to cluster and heat leading eventually to the formation of galaxies and the present star-filled universe.

In charts when the moving averages start to cluster and become entwined this is like a springboard from which share prices can surge higher. One advantage of this technique is that it is based on monthly candlesticks. This means the signals come sooner. We can act as soon as the shortest moving average (the hard-to-see green line on the charts) turns higher.

While all the moving averages are rising in tandem, we know the chart is strong. This often coincides with what I call the company having its ‘day in the sun’ moment.

These signals are not a magic bullet. Sometimes they give signals which are quickly reversed. Nevertheless, they are important as suggested by the ones I have marked on the Netflix chart.

The sell signals are harder to use. This is almost by definition. Since 2003 Netflix shares are up around 2,600 times. In this period buy signals are far more likely to be successful than sell signals. It is also noticeable that sell-offs are dramatic affairs.

When it comes to chart breakouts I prefer to use charts where each candlest stick represents a longer period than a month.

On this chart the big breakouts are more vivid but only the shortest green moving average is of much use. The longest red one has only just started to be calculated. You would need the lifespan of Gandalf to find it of much value. Even so, there was a recent bunching from which Netflix has given a buy signal.

If you listen to founder, Reed Hastings and read the group’s regular letters to shareholders, it has been onwards and upwards all the time and the opportunity remains enormous. The company has 283m paid subscribers and others watching free with ads. Not only could this number increase hugely but as the service provides ever more value to subscribers it could charge more.

It is in a virtuous circle. The more subscribers it has the more funding it generates for ever higher quality programming. There is also scope for special events like partnerships with Space X to stream the first landing on Mars, which could be robots made by Tesla rather than humans. I made that up, but why not providing almost limitless funding one day?

Looking at this chart we can see how the bunching phenomenon makes it easier to anticipate movements in the longer averages. Time and again the moving averages bunch together, the shortest green line changes direction and later the longer moving average, the red line, follows suit. There is much to learn but these charts look like an interesting addition to the armoury.

The company has exciting aspirations.

And its services lie at the heart of the action.

This remains a very strong chart with all the signs of a fresh breakout.

Nvidia CEO, Jensen Huang, is to deliver the keynote speech at CES on Monday. This is what observers say about it.

“AI is no longer the future; it’s the now. NVIDIA’s innovations are powering the fourth industrial revolution, creating unprecedented opportunities for forward-thinking investors. As the global economy continues to embrace AI-driven advancements, we believe that NVIDIA is likely to continue to lead the charge, delivering outsized returns and influencing broader market trends.”

CES 2025 itself underscores the ubiquity of AI in today’s technological landscape. The conference, which runs from Tuesday to Friday, features more than 3,500 exhibitors and 130,000 attendees, all focused on the latest breakthroughs.

The broader implications for markets cannot be overstated. As AI continues to integrate into every aspect of life—from personalized healthcare solutions and autonomous transportation to next-generation gaming and enterprise efficiency—the companies driving this transformation will be the key beneficiaries. NVIDIA’s dominant position in the AI ecosystem places it at the forefront of this economic shift.

Nigel Green concludes: “Huang’s CES keynote is a signal of what’s to come for investors around the world.

“As he takes the stage, the message is clear: NVIDIA’s vision and execution are not only driving the AI revolution—they’re also likely to power financial markets again in 2025.”

Nigel Green, who leads one of the world’s largest independent financial advisory and asset management organizations, 6 January 2025

Share Recommendations

Shopify. SHOP

Netflix NFLX

Hubspot. HUBS

Nvidia. NVDA

Strategy – Always Time To Look & Learn

Bunching of the moving averages and subsequent buy or sell signals are a powerful addition to our armoury of indicators but the key is stock selection. Get that right and everything else falls into place.