Nvidia’s Chart Signals Caution Amid Technical Correction
The tech giant’s stock has been on a downward spiral, marking its fourth consecutive session of decline on Tuesday. This slump has pushed Nvidia’s shares into a technical correction, with a 15% drop from last month’s record high. Despite this, the company’s prospects remain strong, with analysts predicting a bright future for the chipmaker in 2025.
A Closer Look at the Chart
After reaching a record high in November, Nvidia’s shares traded sideways before falling below the 50-day moving average late last week. This move could be a sign of further consolidation on the horizon. Notably, stock volume has been below longer-term averages, but has seen an uptick in recent trading sessions, indicating increased selling activity. The relative strength index (RSI) has also slipped below 50, confirming weakening price momentum.
Key Support and Resistance Levels
Investors should keep a close eye on several key price levels that could impact Nvidia’s stock. If the selling continues, the $115 level could be a crucial support area, with the 200-day moving average and comparable price action between May and October providing a potential floor. A breakdown below this level could see the shares revisit lower support around $102, a region that has historically been a point of entry for investors.
Upside Potential
On the flip side, if Nvidia’s stock regains its upward momentum, the $140 level could be a key resistance area, with a horizontal line linking the June swing high and similar price points between October and December providing a potential ceiling. Further buying could propel a bullish move to around $150, a region where investors may look to lock in profits near a cluster of candlesticks positioned just below the stock’s record high.
What’s Next for Nvidia?
While the company’s prospects remain strong, investors will be watching closely to see if Nvidia can overcome the recent overheating issues with its new Blackwell chips and deliver on its promise of significant volume sales. With the stock still up 160% since the start of the year, outpacing the S&P 500’s 27% return, there’s plenty of room for growth – but investors will need to see further confirmation before jumping back in.
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