Looking at the recent price levels of these Nvidia after the stock price fluctuations, the price rose nearly 16% last week.
Key Points
Last week, after the decline in recent stock prices led investors to panic sell, Nvidia's stock may remain on watchlists on Monday, following the rapid rise of AI investors' darling.
The stock price has risen towards the top trendline of the downward channel, but the movement occurred with low volume, indicating a lack of institutional activity.
Investors should monitor the key overhead price levels of $126, $136, and $166 on Nvidia's chart, as well as the important support levels of $97 and $75.
After the recent surge of artificial intelligence (AI), Nvidia's stock may remain on watchlists on Monday. Following Wall Street's favorable comments pointing out the opportunity for continued growth in the relentless demand for AI infrastructure, investors acquired the recent stock price decline.
Last week, despite the AI chip maker's stock price exceeding analysts' expectations for earnings and sales, investment optimism for AI cooled down due to the slowdown in quarterly growth. After experiencing an approximately 23% decline from late August to early September, the stock price rose by nearly 16%. However, market sentiment received a recent boost after analysts at Bernstein referred to Nvidia as the "best way to play AI." Meanwhile, analysts at Bank of America noted earlier this month that the recent pullback offers an "opportunity for strengthening purchases."
Below, we will take a closer look at Nvidia's chart and use technical analysis to identify important price levels to watch for after the recent stock volatility.
Stock trading within a descending channel.
Since hitting a record high in late June, Nvidia's stock has been trading within a descending channel. This chart pattern consists of two parallel downward sloping trend lines indicating a downward trend in the stock.
Recently, the price has been moving towards the top trend line of the channel and in the process, reclaimed the 50-day moving average (MA).
However, similar to the August rally, the latest rise in the stock occurred with low volume, indicating a lack of participation from institutions. Last week, the stock price rose by 15.8% and closed trading at $119.10 on Friday.
Overhead price levels to monitor.
The first important area to monitor on the chart is around $126, where the stock price may encounter resistance near the top trend line of the descending channel. It is also worth noting any increase in trading volume at this level, which may signal an impending breakout above the pattern.
If a breakout occurs, investors should keep an eye on the $136 area. This is a place where sellers may lock in profits near the record closing price of the stock on June 18, closely aligning with the swing high in mid-July.
To predict a target price beyond Nvidia's all-time high (ATH), you can use the measurement principle. To do this, calculate the distance between the two trend lines of the descending channel and add that amount to the trend line above the pattern. For example, adding $40 to $426 predicts a rise target of $166.
Investors need to pay attention to even lower price levels.
If the stock price of Nvidia falls from its current level, investors should pay attention to the $97 level. This level is where the stock may encounter support near a horizontal line that connects a series of equivalent trading levels around the twin peaks in March and the recent low point last month.
Further selling could lead to a breakdown below the lower trendline of the channel and the 200-day MA, with the stock price potentially revisiting the $75 level on the chart, which could attract bargain hunters around the peak in mid-February and the trough in April.
Comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Please read the disclaimer for guarantees and liabilities.
As of the date this article was written, the author does not own the securities mentioned above.
Do you have news tips for Investopedia reporters? Please email us at Tips@investopedia.com.
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Last week, after the decline in recent stock prices led investors to panic sell, Nvidia's stock may remain on watchlists on Monday, following the rapid rise of AI investors' darling.
The stock price has risen towards the top trendline of the downward channel, but the movement occurred with low volume, indicating a lack of institutional activity.
Investors should monitor the key overhead price levels of $126, $136, and $166 on Nvidia's chart, as well as the important support levels of $97 and $75.
After the recent surge of artificial intelligence (AI), Nvidia's stock may remain on watchlists on Monday. Following Wall Street's favorable comments pointing out the opportunity for continued growth in the relentless demand for AI infrastructure, investors acquired the recent stock price decline.
Last week, despite the AI chip maker's stock price exceeding analysts' expectations for earnings and sales, investment optimism for AI cooled down due to the slowdown in quarterly growth. After experiencing an approximately 23% decline from late August to early September, the stock price rose by nearly 16%. However, market sentiment received a recent boost after analysts at Bernstein referred to Nvidia as the "best way to play AI." Meanwhile, analysts at Bank of America noted earlier this month that the recent pullback offers an "opportunity for strengthening purchases."
Below, we will take a closer look at Nvidia's chart and use technical analysis to identify important price levels to watch for after the recent stock volatility.
Stock trading within a descending channel.
Since hitting a record high in late June, Nvidia's stock has been trading within a descending channel. This chart pattern consists of two parallel downward sloping trend lines indicating a downward trend in the stock.
Recently, the price has been moving towards the top trend line of the channel and in the process, reclaimed the 50-day moving average (MA).
However, similar to the August rally, the latest rise in the stock occurred with low volume, indicating a lack of participation from institutions. Last week, the stock price rose by 15.8% and closed trading at $119.10 on Friday.
Overhead price levels to monitor.
The first important area to monitor on the chart is around $126, where the stock price may encounter resistance near the top trend line of the descending channel. It is also worth noting any increase in trading volume at this level, which may signal an impending breakout above the pattern.
If a breakout occurs, investors should keep an eye on the $136 area. This is a place where sellers may lock in profits near the record closing price of the stock on June 18, closely aligning with the swing high in mid-July.
To predict a target price beyond Nvidia's all-time high (ATH), you can use the measurement principle. To do this, calculate the distance between the two trend lines of the descending channel and add that amount to the trend line above the pattern. For example, adding $40 to $426 predicts a rise target of $166.
Investors need to pay attention to even lower price levels.
If the stock price of Nvidia falls from its current level, investors should pay attention to the $97 level. This level is where the stock may encounter support near a horizontal line that connects a series of equivalent trading levels around the twin peaks in March and the recent low point last month.
Further selling could lead to a breakdown below the lower trendline of the channel and the 200-day MA, with the stock price potentially revisiting the $75 level on the chart, which could attract bargain hunters around the peak in mid-February and the trough in April.
Comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Please read the disclaimer for guarantees and liabilities.
As of the date this article was written, the author does not own the securities mentioned above.
Do you have news tips for Investopedia reporters? Please email us at Tips@investopedia.com.
Tips@investopedia.com
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