Nvidia shares have seen a surge in volatility, dropping 16% since last week’s earnings report. Technical analysts have identified the stock’s key support levels at $100 and $90. One technical analyst said a buying opportunity would be if Nvidia falls to its 200-day moving average.
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All eyes are on Nvidia as its stock price has been hit by a volatile sell-off following its second-quarter earnings report last Wednesday.
Despite beating earnings expectations, shares have fallen as much as 16% over the past week, leaving investors searching for where and when the stock might bottom out.
Business Insider spoke with some chart-reading technical analysts to get their take on Nvidia’s current price action and where the stock might go next.
Analysts say there are two key dividing lines for Nvidia stock that could determine the company’s long-term market leadership.
First, there is the psychological $100 level, and then there is the all-important 200-day moving average just below $90, which coincides with the lows reached on August 5th.
Nvidia shares traded in a range of $104 to $110 on Wednesday.
“The 200-day average is currently around $89 and has converged with the intraday low from August 5, so in our view, the long-term trend of the stock being above this support remains unchanged,” Oppenheimer technical analyst Ari Wald told Business Insider.
Wald said he wasn’t necessarily surprised by Nvidia’s recent weakness, given that September is a seasonally weak period for the overall market.
If Nvidia’s stock price approaches its 200-day moving average, which it has been above since January 2023, Wald would see that as “an opportunity to continue the stock’s upward trend.”
For Katie Stockton, founder of Fairlead Strategies, Nvidia shares are weak and could remain flat for some time.
“NVDA is showing signs of exhausting mid- to long-term upside potential from an overbought/oversold perspective. We expect the stock to remain in the digestion phase for the next few months,” Fairlead Strategies said.
According to Stockton, if Nvidia shares can trade convincingly around a key support level of $90, they could eventually target resistance levels above $130.
This indicates a potential upside of at least 19% from current levels.
Nvidia shares have seen some pullbacks in recent weeks, Adam Turnquist, technical strategist at LPL, told Business Insider.
The company’s stock price failed to reach its July highs in August, falling below its 20-day and 50-day moving averages.
“Volume and momentum indicators suggest increased risk of further downside, with support located near $100 (psychological level and August low), $95 (March high), and $88.50-$90.69 (200-day moving average / August intraday low),” Turnquist told Business Insider.
A similar phenomenon is happening on Nvidia’s chart relative to the S&P 500, Turnquist said, which could pose danger down the line if Nvidia falls below its August intraday low of $90.69.
“If the ratio chart falls below the August lows, NVDA’s market-leading position could be eroded,” Turnquist said.
Below is a technical chart for Nvidia that shows various price levels to watch going forward.
TC2000; Market Insider
