Market Analysis: NVDA Shares Decline after Strong Report


The previous historical record and maximum for 2023 (USD 502.66 per share) was set on August 24 against the backdrop of the publication of the 2nd quarter report.

This week, NVidia published its report for the Q3, and again the price set a record high, as the report turned out to be better than expected:
→ earnings per share: actual = USD 4.02, forecast = USD 3.37;
→ gross revenue: actual = USD 18.12 billion, forecast = USD 16.18 billion.

However, after the publication of the report, the NVDA share price shows bearish dynamics — perhaps the information from the company disappointed overly optimistic investors. Or perhaps some market participants used the excitement associated with the publication of the report in order to lock in profits from the 2023 rally.

However, NVDA shares fell 2.6% yesterday after CFO Colette Kress said sales to China, impacted by recent US government export controls, would decline significantly in the fourth quarter.

Thus, the chart of NVDA shares develops a picture that may worry the bulls:
→ The price fell below USD 480 per share yesterday, despite the recently published good report.
→ The price is near the median line of the ascending channel, which describes the market dynamics starting from the gap on May 25 (excluding the second half of October). Moreover, the events of this week show that the median line acts as resistance.

If the price is able to hold above the USD 480 level, this could mean that the CFO's statement caused only a short-term correction, then a gradual increase along the median line would be a sign of a strong market. Otherwise, the price may continue to decline to the lower border of the channel, acting bearishly after the publication of a strong report — just like 3 months earlier.

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