Stock of the day: Nvidia

In today’s analysis, I’ll shine a spotlight on NVIDIA, a stock that undeniably dominated investors’ watchlists earlier this year. Its trajectory, however, has shown a few hiccups recently. What catches the eye on the chart is the classic ‘head and shoulders’ pattern, delineated in a muted grey. This formation often signals a potential trend reversal, and in NVIDIA’s case, it may be hinting at a downward shift.

Diving deeper into last week’s performance, NVIDIA broke through some critical supports. Two key markers stand out: the ‘neckline’ of the head and shoulders, illustrated with a stark black line, and the 23.6% Fibonacci retracement level, highlighted in yellow. Notably, both these support levels align closely, accentuating their importance. With the stock’s closing below these pivotal supports, there’s a pronounced sell signal, beckoning traders’ attention.

So, what’s the next stop for NVIDIA? With the current momentum, the stock seems to be eyeing the orange zone, which aligns closely with the 38.2% Fibonacci retracement level. This area isn’t unfamiliar territory for NVIDIA. Rewind to November 2021, and you’ll find the stock peaking around this mark. Given the prevailing trends, the probability of NVIDIA revisiting this level appears substantial.

However, markets are often a blend of surprises and logic. If NVIDIA manages to rally and move above the black neckline, it would negate the current bearish outlook. Such a move would not only invalidate the sell signal but might also offer an attractive opportunity for bullish investors. As always, keep a keen eye on the chart, factor in global market sentiments, and strategize with caution.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-nvidia-5