Stock of the Day: Nvidia

In today’s stock of the day, let’s take a look at Nvidia, which has been trading rather quietly since mid-November. The price has been moving inside a clear sideways range, a rectangle marked with orange lines.

The lower boundary of this range sits around $170 and acts as support, while the upper boundary near $194 acts as resistance. For several months the market has been oscillating between those two levels without establishing a clear directional trend.

Last week we saw an important development. Price briefly broke above the upper boundary of the rectangle. That move, marked in red, turned out to be a false breakout. Shortly after the breakout attempt, Nvidia fell back inside the range. From a technical perspective, a false breakout from resistance is usually interpreted as a sell signal.

That explains why the end of last week was relatively weak for the stock. The failed breakout shifted short-term sentiment to the bearish side.

After this kind of signal, the most logical target becomes the lower boundary of the rectangle near $170. Once price reaches that support, traders should watch carefully how the market reacts. A strong bounce from that level could generate a buy signal and keep the range intact. On the other hand, a clean break below support would confirm continuation of the bearish move and extend the sell signal.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-nvidia-19