NVDA Stock - Last Chance For The Bulls!

Summary

In today’s Nvidia daily update, we dive into the volatile market movements following the Fed’s 25 basis point rate cut. Nvidia experienced a 2.6% drop, partly due to concerns over its ability to sell chips in China. The stock is currently at a critical point, with potential for both bearish and bullish outcomes. A head and shoulders pattern could signal a bullish reversal if key levels are broken, while a loss of crucial support levels could lead to further declines. With seasonality playing a role and options flow leaning bullish, all eyes are on how Nvidia performs in the coming days.

Takeaways

• 😀 Nvidia stock experienced volatility today, dropping 2.6% amidst a rate cut decision from the Fed.
• 😀 Tomorrow's market reaction to the 25 basis point rate cut could lead to further volatility.
• 😀 This week's triple witching could contribute to heightened market activity and uncertainty.
• 😀 Nvidia's drop was partly due to concerns over China potentially banning their chips, though the news was not fully confirmed.
• 😀 The chart suggests a potential bearish scenario, with a critical level at 169–170; failure to hold this level could lead to further declines toward 150.
• 😀 There's still a chance for a bullish reversal if Nvidia can hold its key support level, especially around the 50 EMA.
• 😀 The current chart setup shows a bullish head and shoulders pattern, offering a potential bullish breakout if the neckline around 180-183 is breached.
• 😀 If Nvidia breaks today's low, it could signal the end of the bullish potential and lead to a bearish trend, with further drops possible.
• 😀 In terms of risk/reward, buying around the current levels could provide a reasonable setup, with a 1.5% risk for a potential 10-15% upside if the bullish pattern plays out.
• 😀 Broader market trends remain bullish for now, but the second half of September could bring volatility, especially considering seasonality trends.
• 😀 Options flow for Nvidia is slightly bullish, with an increasing number of short-term calls suggesting that some traders expect a bounce back to 174.

Q & A

What event caused the market volatility mentioned in the video?

The market volatility was mainly driven by the Federal Reserve's 25 basis point rate cut. This kind of event typically triggers secondary volatility in the market as traders react to the news.

How did Nvidia perform in the market today?

Nvidia's stock went down by 2.6%, closing at around $170. This drop was partly due to negative news about potential restrictions on Nvidia's chip sales to China.

What technical pattern did the analyst mention for Nvidia’s stock?

The analyst mentioned a potential **head and shoulders pattern**. This pattern, if it forms correctly, could indicate a bullish reversal, with a breakout above the $180–$183 range being a key trigger.

What are the key support and resistance levels to watch for Nvidia?

The key support level for Nvidia is around **$169–$170**. If this level holds, the stock could still bounce. The key resistance level is around **$174**, and if Nvidia can break this, it could move toward the **$180–$183** range.

What would the bearish scenario look like for Nvidia?

In the bearish scenario, if Nvidia loses the **$169–$170** support, the price could continue to decline, potentially reaching the **$150** target. The 9 and 21 EMAs crossing below the 50 EMA would also signal increased bearish pressure.

What is the importance of the **$150** target for Nvidia?

The **$150** target represents a possible downside level if the bearish trend continues. It would be a key price point to monitor, as losing the **$169–$170** support could push Nvidia towards this lower level.

How did the options market react to Nvidia's performance?

The options flow showed a slightly more bullish sentiment. Traders were focused on short-term calls targeting **$172.5 and $170 strikes** for the upcoming weeks, indicating that there’s still some optimism about a potential bounce.

What does the analyst mean by 'the bulls still have a shot'?

When the analyst says 'the bulls still have a shot', they’re referring to the fact that although Nvidia is facing some bearish pressure, there’s still a chance for the stock to turn around if it can hold key support levels and break resistance, especially the $180–$183 range.

What should traders watch for in the next few days based on the analysis?

Traders should watch the **$169–$170** support level and the **$174** resistance level. If Nvidia can break the resistance, it might signal a bullish move. If the stock loses the support, it could signal further downside.

Why is the 50 EMA important in this analysis?

The **50 EMA** is important because if Nvidia’s short-term EMAs (the 9 and 21) cross below it, it would signal a more significant bearish trend. This crossover is a major warning sign for the stock’s potential downtrend.