NVDA Stock - Is NVIDIA Going Higher?

Summary

In this Nvidia daily update, the host discusses recent market activity and stock performance, focusing on technical analysis, stock levels, and potential risks. The stock has faced resistance at key Fibonacci levels, and a potential bearish trend is monitored with an emphasis on candlestick patterns like the bearish piercing candle. A drop below certain price levels would signal concern, while a rise above specific targets would suggest further bullish momentum. The host also highlights concerns on the weekly chart, with overextended indicators and potential market corrections, stressing the importance of watching for key support zones and options flow patterns.

Takeaways

• 😀 The video discusses the recent performance of Nvidia stock, with a focus on price movements and technical analysis.
• 😀 The stock closed at $172.5, experiencing a slight 35% drop, with resistance seen at the 174 level (1.272 Fibonacci extension).
• 😀 There were concerns about a potential bearish engulfing candle, but the bulls managed to prevent it from occurring.
• 😀 A bearish piercing candle was suggested, but its validity requires confirmation, especially a red closure below $171-$170 on Monday.
• 😀 If the stock price holds above $171 and moves higher, the next targets would be around $174 (1.414 Fibonacci) and $179-$180 (1.618 Fibonacci).
• 😀 The importance of the 9 exponential moving average (EMA) is highlighted, as it has acted as a key support level.
• 😀 The stock is showing strong upward momentum, but a closure below $171 could signal a pullback to the high $160s or lower.
• 😀 On the weekly chart, concerns about overextension are raised, with the SMI (Stochastic Momentum Index) indicating a potential top for the stock.
• 😀 The MACD histogram hasn't shown a lower high yet, but if it does, it could indicate a reversal or correction similar to previous price drops.
• 😀 A correction of 14% to the high $140s is a possibility, which wouldn't be surprising given Nvidia's parabolic rally.
• 😀 Despite these warning signs, the bulls are still in control, and the video advises monitoring the stock for any signs of losing momentum.

Q & A

What is the main focus of the video analysis?

The main focus of the video is to analyze Nvidia's stock performance, identify key support and resistance levels, and predict potential price movements based on technical analysis.

What is the significance of the $174 price level?

The $174 level is important because it coincides with the 1.272 Fibonacci extension, acting as a resistance zone. Nvidia has faced issues breaking above this level, and it could determine the stock’s short-term direction.

What are the potential concerns for Nvidia's stock mentioned in the video?

The concerns include the possibility of a bearish candlestick pattern, such as a bearish engulfing or bearish piercing candle, which could signal a downturn if followed by further bearish confirmation. Additionally, the Stochastic Momentum Index (SMI) is in overextended territory, raising concerns about the sustainability of the current rally.

What does the video suggest about the potential for a pullback in Nvidia's stock?

The video suggests that a close below the $170-$171 range could signal a pullback, potentially bringing the stock down to the 9 Exponential Moving Average (EMA) around the high 160s. A breakdown below the 9 EMA would raise concerns about further downside.

What are the critical support and resistance levels to watch for Nvidia's stock?

Key support levels are around $170-$171 and the 9 EMA in the high 160s. The resistance level to watch is around $174, with further upside targets at $179–$180 based on Fibonacci extensions.

How does the video describe Nvidia’s momentum on the weekly chart?

The weekly chart shows the SMI in overextended territory, similar to past instances when Nvidia saw significant pullbacks. If the MACD histogram forms a lower high, it could indicate a top, suggesting a potential decline in the stock’s price.

What role does the Stochastic Momentum Index (SMI) play in the analysis?

The SMI is an important indicator as it shows the stock's momentum. In this case, the SMI is in overextended territory, which historically has been a sign of potential price reversal, signaling that the stock may be reaching a top.

What does the video say about Nvidia’s risk/reward situation?

The video suggests that the current risk/reward ratio is less favorable for buyers at these levels, as a 14% drop could occur if the stock faces resistance. This drop would be in line with historical behavior after a strong rally.

How do the options flows reflect the sentiment towards Nvidia's stock?

The options flow indicates a cautious sentiment, with significant puts being placed, particularly a $152.5 put and a $172.5 put for the upcoming week. These large put orders suggest that some investors are hedging against a potential drop in the stock price.

What are the potential scenarios if Nvidia manages to break above the $174 level?

If Nvidia breaks above $174, the next major resistance targets would be $179–$180, driven by Fibonacci extensions. This could indicate that the stock may continue its bullish momentum if it holds above key support levels.