Technical Analysis – Nvidia stock enjoys big recovery. What comes next?
Nvidia’s stock extends exponential rally; pauses slightly below 130
There is potential for more upside as overbought signals not confirmed yet
Earnings due on Wednesday, August 28 after market close
Nvidia staged another descent rally along with other tech stocks on Monday, sparking optimism that the ongoing bullish wave is not part of a bearish trend, and that the worst is now behind us as the price violated the tentative descending trendline taken from June’s record high.
Some stability would not be a big surprise following two quick progressive weeks. The 78.6% Fibonacci retracement of the previous bearish cycle is in the neighborhood at 130.30 and could cap upside pressures. Note that the stochastic oscillator is flattening after surpassing its previous highs in the overbought zone, warning that the bears might be around the corner.
However, there are indications that the bullish cycle will continue for a while longer before the bears regain control. The RSI is some distance below its 70 overbought level and the MACD has just stepped into the positive region. Additionally, the price has marginally surpassed the Ichimoku cloud, and both the %D and %K lines have shown a bullish crossover.
If the stock remains above the upper band of the cloud at 128.20, it could gain momentum and reach July’s peak of 134.88 or even test its all-time high of 140.29. Further up, the price could take a breather near the broken ascending trendline from May’s lows at 148.26 before meeting the 150.00 psychological level.
On the downside, the 123.90 region could buffer selling interest ahead of the 50-day simple moving average (SMA) at 120.00. If the 117.00 region gives way too, the next stop could be near the 20-day SMA at 112.00 or lower at 108.00.
Overall, Nvidia’s stock is expected to perform well in the near future. While it’s normal to experience a pause after a significant rally, the upward trajectory could gain more traction.Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
