NVDA Analysis: Share Price Reaches 2-month High on News of New Chips


Less than a month ago, US officials tightened rules on sales of high-end artificial intelligence chips to China. And yesterday, from the SemiAnalysis newsletter, it became known that Nvidia has developed new chips called HGX H20, L20 PCIe and L2 PCIe, which are not subject, in whole or in part, to existing export restrictions to China.

The news about the new chips gave bullish momentum to the Nvidia stock market.

The NVDA stock price chart shows that:
→ the price crossed the peak on October 12 (this is peak D, the formation of which we assumed in the analysis of the NVDA stock price on September 14);
→ NVDA share price shows bullish dynamics after a false breakout of the psychological level of USD 400 per share at the end of October;
→ the price dropped at the end of yesterday's trading day, forming a potential false breakout of the October peak. It seems that the bears have become more active, trapping overly optimistic buyers. The 4-hour chart shows a bearish engulfing pattern.

Note that the market was extremely volatile at the end of August, as evidenced by the ATR indicator. In this active market, large participants had enough counter liquidity to cover long positions (take short positions). And now, with the price rising to the levels of this important August range, the bulls may exhaust their confidence. To overcome it, strong drivers are needed, which can happen during the publication of the company's report for the 3rd quarter — it is scheduled for November 21.

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