NVDA stock reveals downtrend

Note: This section contains information in English only.
Source: Dukascopy Bank SA


From a fundamental perspective, tech companies have reported that they continue to experience increasing costs, but see no major increase in profits due to AI and other new developments. Meanwhile, there are signs that the US Federal Reserve might not cut interest rates in September. Both of these aspects are the cause of profit taking in the top stock of them all, Nvidia. After spectacular gains, a decline has occurred.

From a technical analysis perspective, the instrument was overbought, as even the daily candle chart started to go parabolic instead of linear. There had to be a period of consolidation or a decline. This time, NVDA started to decline. The initial decline was followed by an attempted recovery that failed at $135.00. The failure marked a new lower high. Most recently, a new lower low was booked, a resistance line was revealed. Moreover, one can observe support and resistance zones near round price levels.

In general, the future direction depends on upcoming tech stock quarterly earnings reports and the Federal Reserve event on Wednesday. However, the technical levels can provide guidance for both a surge and a decline of the price.

In regards to a likely decline, the price is expected to look for support first in the 106.25/107.25 range and afterwards the $100.00 mark. The $100.00 mark is surrounded by a resistance and support range that is located from 96.85 up to 102.10. If this range fails, take into account the potential support near 90.00 and 85.00 levels

On the other hand, a recovery of the stock price is expected to face the 116.85/118.75 range, the 50-day simple moving average and the descending trend line. If these levels fail to act as resistance, NVDA could reach for the 125.00 mark. Higher above, note the prior notable high levels at 135.00 and 140.00. Meanwhile, the 130.00 mark has not acted as major resistance.
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