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Nvidia shares have seen increased volatility, falling 16% since it reported earnings last week.
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Technical analysts have highlighted key support levels for the stock price at $100 and $90.
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A technical analyst highlighted a buying opportunity for Nvidia if it drops to its 200-day moving average.
All eyes are on Nvidia as stocks experience a volatile sell-off following its second-quarter earnings report last Wednesday.
With Shares have fallen as much as 16% over the past week. Despite beating earnings estimates, investors are eager to know where and when the stock might bottom out.
Business Insider spoke to technical analysts who have a knack for reading charts to gauge their observations on Nvidia's current price and where the stock is headed next.
Analysts say there are two key lines in the sand for Nvidia stock that could determine the success or failure of its long-term market leadership.
The first is the psychological level of $100, followed by the all-important 200-day moving average, which is located just below $90. That level also coincides with the low reached on August 5.
Nvidia shares traded in a range of $104-$110 on Wednesday.
“The 200-day moving average is currently hovering around $89 and is also converging with the intraday low from August 5. Therefore, for us, nothing has changed in the stock's long-term trend above this support,” Ari Wald, a technical analyst at Oppenheimer, told Business Insider.
Wald said he wasn't necessarily surprised by the recent weakness in Nvidia's stock, given that September is a seasonally weak time for the broader market.
If Nvidia shares move closer to their ascending 200-day moving average, above which they have been since January 2023, Wald would view that as “an opportunity to buy the stock's intact uptrend.”
For Fairlead Strategies founder Katie Stockton, Nvidia stock looks tired and could move sideways for some time.
“NVDA is showing signs of bullish exhaustion in the medium to long term from an overbought/oversold perspective. We expect the stock to remain in its digestion phase for a few months,” Fairlead Strategies said.
If Nvidia shares manage to trade decisively above their key support level around $90, the stock could eventually target the $130 resistance level and beyond, according to Stockton.
This represents a potential increase of at least 19% from current levels.
LPL technical strategist Adam Turnquist told Business Insider that Nvidia stock has made some minor infractions in recent weeks.
Stocks failed to reach July highs in August, falling below their 20- and 50-day moving averages.
“Volume and momentum indicators point to increased downside risk ahead, with support coming in near $100 (psychological level and August lows), $95 (March highs), and near the $88.50-$90.69 range (200-day moving average/August intraday low),” Turnquist told Business Insider.
A similar story is playing out on Nvidia's chart relative to the S&P 500, and there could be danger ahead if Nvidia falls below its August intraday low of $90.69, according to Turnquist.
“A break below the August lows on the ratio chart would suggest that NVDA's market-leading status could be lost,” Turnquist said.
Here is a technical chart of Nvidia showing the various price levels to watch going forward.
Read the original article at Business information