Stock of the day: Nvidia

By Tomasz Wisniewski|

Published: November 09 2023, 05:17 GMT+0

Stock of the day: Nvidia


NVIDIA’s stock performance has been a rollercoaster ride for investors, marked by a promising ascent since October 2022 but recently facing the shadows of a potentially bearish pattern. The technical landscape was dominated by a head and shoulders formation, traditionally viewed as a precursor to a trend reversal. However, NVIDIA’s narrative took an unexpected turn.

The crucial moment in this technical drama was the behavior of the stock around the neckline of the pattern, delineated in yellow on the charts. While October saw sellers rallying to push for a breakdown, their efforts were in vain. Instead of succumbing to bearish pressure, NVIDIA’s stock demonstrated resilience by bouncing off the support level, undermining the validity of the head and shoulders pattern.

Moving into November, the company’s fortunes appear to have reversed dramatically. Every session has seen the stock climbing, defying the gravity that the head and shoulders pattern threatened to impose. The definitive break above the red downtrend line, which connected the peak of the head to the peak of the right shoulder, was a significant bullish signal. This break invalidated the ominous pattern and instead put the stock on a buy trajectory.