After experiencing significant gains in the first half of 2024, Nvidia Corp. (NVDA) is now facing a potential shift in sentiment as indicated by the charts. The emergence of bearish engulfing patterns in mid-June and mid-July suggest a short-term reversal in sentiment, with traders selling strength around the $140 level. The failure to push past the previous high in July indicates a potential stall in the long-term uptrend. At its current price of $120, Nvidia is testing the most recent swing low in mid-June, which also coincides with key Fibonacci retracement levels and the 50-day moving average.
Should Nvidia break below the $120 support level, it would signify a new swing low, a failure to hold key Fibonacci support levels, and a move below the 50-day moving average. In this scenario, the next downside objective could be around $100, representing a significant retracement from the June peak. A drop to $100 would equate to approximately a 30% decline and could have implications for broader indexes like the S&P 500 and Nasdaq 100, given Nvidia’s weighting.
On the other hand, if Nvidia is able to establish support around current levels and surpass the June and July highs, there could be further upside potential for the stock. A break above the recent highs could signal a continuation of the uptrend and potentially lead to more gains in the future. However, the current chart patterns suggest a more cautious approach may be warranted in the near term.
The technical analysis of Nvidia’s stock price points towards a potential shift in sentiment and a test of key support levels. The break below $120 could signal further downside towards $100, while a successful bounce from current levels could pave the way for additional upside. Investors should closely monitor these key levels and market dynamics to make informed decisions about their investment strategies.