Important points
Nvidia (NVDA) stock rose on Monday ahead of the artificial intelligence (AI) darling’s quarterly results later this week and on reports that its next-generation AI chip is facing server overheating issues. It is attracting attention.
The company is scheduled to report results after the closing bell on Wednesday, and is expected to report that both sales and profits rose more than 80% year over year, according to analyst consensus estimates. Investors will also be watching for updates on Nvidia’s Blackwell AI chip shipments amid concerns that supply constraints could limit the upside to the company’s near-term outlook.
Blackwell’s chips also experienced overheating issues when installed in server racks designed to hold up to 72 graphics processing units (GPUs), The Information reported on Sunday. The incident may be subject to further scrutiny as a result of the report.
Nvidia shares fell 0.7% to $141 in late morning trading Monday, after falling more than 3% earlier in the session. The stock price has nearly tripled since the start of 2024.
Below, we analyze the technicals on Nvidia’s weekly chart to identify key price levels that other investors may be watching.
Slowdown in purchasing momentum
After reaching its all-time high in June, Nvidia stock traded within a symmetrical triangle until breaking out of that pattern last month.
However, since then, while the stock price has continued to hit new highs, trading volume has continued to decline, indicating a lack of buying participation from large market participants.
Additionally, as stocks have formed higher peaks since March, the Relative Strength Index (RSI) has formed a relatively shallow peak, creating a bearish divergence, which is a sign of slowing buying momentum. It’s a signal.
Take a look at the three major support levels on Nvidia’s chart and use technical analysis to predict a bullish price target.
Key support levels to look out for
On a breakdown below the symmetrical triangle, the stock could first revisit support around $97, a position that could give investors a buying opportunity near the March high, which roughly coincides with the early August low. This is the position on the chart that you might be looking for.
A sell below this level opens the door to a retracement to the $76 level, an area on the chart where the stock could encounter support from the mid-April lows.
If the stock price corrects technically, it could reach the $48 level. The area is about 66% below Friday’s close and is likely to attract bargain hunters near the narrow consolidating range that formed on the chart from July 2023 to January.
Bar pattern price targets to monitor
If the stock price of a stock popular with AI investors continues to trend up, you can use bar patterns to predict potential bullish targets. Bar patterns are a technique for predicting future price movements by analyzing previous trends.
When applied to Nvidia’s chart, this tool extracts the stock’s trend movement from January to June and repositions it from last month’s symmetrical triangle breakout point. This predicts a bullish target of around $270, where investors may decide to book profits.
We chose this previous move because it is similar to how the current rally started and could play out if price history rhymes. Because it started after the breakout of.
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As of the date this article was written, the author did not own any of the securities mentioned above.
