NVDA Stock Analysis: Reversal Pattern Forming on the Chart

FXOpen

NVDA stock has been a stock market leader throughout 2023 amid the AI boom. NVDA's share price rose by more than 200%, allowing NVidia's capitalization to exceed USD 1 trillion.

However, a pattern is forming on the chart, warning that NVDA's share price may decline. This is a diamond pattern A-B-C-D (determining the position of point D still takes time), which is formed from intersecting parallel lines of support and resistance. They are shown on the chart using ascending and descending channels.

Even though this instance of the pattern is far from the standard, it deserves attention.

Arguments confirming that the pattern can work:
→ in September, NVDA stock performed weaker than the S&P 500 index;
→ at the top of the diamond, there were high trading volumes, according to the NASDAQ exchange. The current price is below the levels at which high-volume transactions were recorded at the end of August. This can be interpreted as the fact that large market participants are taking profits (and/or even taking a short position);
→ the media is disseminating information that NVDA shares were sold by Berkshire (managed by Buffett) and the company's president Jen Huang herself — according to Yahoo Finance, on September 11, she sold about 30k shares.

Could the AI boom be winding down? According to investor Rob Arnott, Nvidia stock is a bubble. And if it bursts, it could trigger a collapse of the entire stock market.

Buy and sell stocks of the world's biggest publicly-listed companies with CFDs on FXOpen’s trading platform. Open your FXOpen account now or learn more about trading share CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Shares

Nvidia Becomes World's Most Valuable Company TSLA Shares Revive After Shareholder Meeting Adobe's Stock Surges Approximately 15% After Report Publication AAPL Shares Drop Following the Apple Intelligence Presentation Is ADBE Stock Undervalued?

Latest articles

Forex Analysis

USD/CAD Rate Reaches Significant Support Level

On June 12, we wrote about bearish signs observed on the USD/CAD chart, pointing to the prospect of USD weakening.

Since then, the USD/CAD rate has decreased by approximately 0.75% and has reached an important support level,

Indices

Nasdaq 100 Index Failed to Hold Above 20,000 Points

On 18th June, we reported that the Nasdaq 100 (US Tech 100 mini on FXOpen) market had recorded a historic high by surpassing the psychological level of 20,000.

At that time, we pointed to the upper line of the

Forex Analysis

Dollar Declines: How Deep Could the Correction Be?

By the end of last week, the American currency traded rather mixed:

  • The USD/JPY currency pair strengthened by more than 200 pips and almost tested the significant resistance level at 160.00.
  • The USD/CAD pair failed to break
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.