Nvidia (NVDA) shares gained nearly 16% last week as investors took advantage of a recent dip in the stock. The surge came after a period of decline in late August and early September, when investors became less optimistic about the company’s prospects in artificial intelligence (AI). However, favorable Wall Street commentary and insatiable demand for AI infrastructure have since boosted market sentiment.
Technical analysis of Nvidia’s chart reveals that the stock has been trading within a descending channel, indicating a downtrend. The recent price movement has brought the stock towards the top trendline of the channel, reclaiming the 50-day moving average in the process. However, the rally has occurred on lackluster volume, suggesting a lack of institutional activity.
Investors should monitor key overhead price levels on Nvidia’s chart. The first important area to watch is around $126, where the shares may encounter resistance near the descending channel’s top trendline. Increasing trading volumes at this level could signal a breakout above the pattern. If a breakout occurs, the $136 region becomes the next target, where sellers may lock in profits near the stock’s previous record close.
To forecast a price target above Nvidia’s all-time high, the measuring principle can be used. By calculating the distance between the descending channel’s two trendlines and adding that amount to the upper trendline, an upside target of $166 is predicted.
On the downside, investors should keep an eye on the $97 region, where the shares may find support near a horizontal line connecting previous peaks. Further selling could lead to a breakdown below the channel’s lower trendline and the 200-day moving average, potentially causing the stock to revisit the $75 area.
It is important to note that the comments, opinions, and analyses expressed in this article are for informational purposes only. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.
In conclusion, Nvidia shares have experienced significant volatility in recent weeks. While the stock has rallied towards the top trendline of a descending channel, the lackluster volume suggests a lack of institutional activity. Investors should monitor key overhead price levels at $126, $136, and $166, while watching important lower price levels at $97 and $75. By staying informed and conducting thorough analysis, investors can make more informed decisions regarding Nvidia’s stock.
