Nvidia (NVDA) Shares Fall Over 4%, Missing a Record High
On 12 September, when analysing Nvidias (NVDA) stock chart, we drew an upward channel (shown in blue) and noted several resistance levels, including:
a downward trendline (shown in red);
a psychological level at $130.
As Nvidias (NVDA) stock chart shows, the bulls managed to overcome this resistance zone with a strong candle on 7 October (marked with an arrow).
Afterwards, Nvidias (NVDA) stock price reached the median line of the blue channel, but sharply reversed downwards yesterday. The bearish sentiment was driven by:
a broader decline in the US stock market, potentially due to investors reassessing risks following the initial corporate earnings results as the reporting season gains momentum;
rumours that the US government is preparing restrictive measures (which may affect Nvidia) to prevent the export of high-tech chip manufacturing technology abroad.
As a result, Nvidias (NVDA) stock price dropped by approximately 4% yesterday, just shy of the record set on 20 June.
Whats next?
A technical analysis of Nvidias (NVDA) stock chart suggests that support could come from the zone formed by the strong bullish candle on 7 October:
this area includes a combination of psychological levels at $130 and $125;
here, demand forces proved their strength, overcoming the red resistance line that had been in play for nearly four months (this line could now act as support);
a bullish Fair Value Gap can be found on the daily chart in this area.
These bullish factors suggest that the price could make another attempt to set a new record by rebounding from the $125-130 support zone.
On the other hand, the bears are showing signs of control around the psychological level of $140, near the record high and the median line of the blue channel.
Meanwhile, forecasts remain positive. According to a Tipranks survey of 42 analysts, 39 recommend buying NVDA shares, with the average price target for NVDA standing at $152.86 in 12 months.
Read more: https://fxopen.com/blog/en/oa-nvidia-nvda-shares-fall-over-4-missing-a-record-high/
Text source: Forex Trading Blog
