Key Takeaways
Nvidia (NVDA) shares rose in premarket trading on Tuesday after dropping more than 6% the previous day following a broader market decline and reports that the AI industry darling’s highly anticipated Blackwell chips will be delayed by at least three months due to a design flaw.
Nvidia shares have fallen 26% since hitting an all-time high on June 18, as investors take profits in semiconductor stocks amid concerns about tightening export controls with China and as shares have risen on the AI-related buzz that has dominated Wall Street since OpenAI released ChatGPT in November 2022.
Below, we analyze Nvidia’s chart and point out key support and resistance levels to watch out for as the company weathers the ongoing market volatility.
NVIDIA Stock at a Crossroads
The company’s shares recovered from Monday’s session lows to close above the key $97 support area, but remain in a precarious position roughly halfway between their 50-day and 200-day moving averages (MAs) amid the potential for further short-term market volatility.
The company’s shares rose 3.4 percent to $103.90 in premarket trading Tuesday, about two hours before the start of trading.
Key support levels to watch
If Nvidia stock fails to hold the key $97 support area, investors should keep an eye on two key levels where the price could attract buying interest.
The first is at $75, just below the 200-day moving average, an area on the chart where price could encounter support from the horizontal line connecting the February peak and April swing low.
A break below this level could send the stock lower to around $51, which would force bulls to defend three record peaks, including two of the all-time highs hit between August and December of last year.
Be aware of important resistance levels
If the stock holds above the $97 level, it’s worth keeping an eye on two key price levels where the stock could face overhead selling pressure.
First, the price will likely encounter resistance near $116, a range of comparable trading levels formed on the chart from May through early August. This is also an area to watch as it is close to a retest of the 50-day moving average that failed earlier this month and the 50% Fib retracement level using the grid stretched from the June high to the August low.
A rise above this level could act as a catalyst for follow-on buying towards the $136 region, where sellers may look to lock in profits near the stock’s all-time highs, which also coincide with July’s swing highs.
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At the time of writing, the author does not hold any positions in any of the securities mentioned.
