Nvidia (NVDA) Shares Fall Over 4%, Missing a Record High

On 12 September, when analysing Nvidia’s (NVDA) stock chart, we drew an upward channel (shown in blue) and noted several resistance levels, including:
→ a downward trendline (shown in red);
→ a psychological level at $130.

As Nvidia’s (NVDA) stock chart shows, the bulls managed to overcome this resistance zone with a strong candle on 7 October (marked with an arrow).

Afterwards, Nvidia’s (NVDA) stock price reached the median line of the blue channel, but sharply reversed downwards yesterday. The bearish sentiment was driven by:

→ a broader decline in the US stock market, potentially due to investors reassessing risks following the initial corporate earnings results as the reporting season gains momentum;
→ rumours that the US government is preparing restrictive measures (which may affect Nvidia) to prevent the export of high-tech chip manufacturing technology abroad.

As a result, Nvidia’s (NVDA) stock price dropped by approximately 4% yesterday, just shy of the record set on 20 June.

What’s next?

A technical analysis of Nvidia’s (NVDA) stock chart suggests that support could come from the zone formed by the strong bullish candle on 7 October:
→ this area includes a combination of psychological levels at $130 and $125;
→ here, demand forces proved their strength, overcoming the red resistance line that had been in play for nearly four months (this line could now act as support);
→ a bullish Fair Value Gap can be found on the daily chart in this area.

These bullish factors suggest that the price could make another attempt to set a new record by rebounding from the $125-130 support zone.

On the other hand, the bears are showing signs of control around the psychological level of $140, near the record high and the median line of the blue channel.

Meanwhile, forecasts remain positive. According to a Tipranks survey of 42 analysts, 39 recommend buying NVDA shares, with the average price target for NVDA standing at $152.86 in 12 months.