Nvidia Corporation (NASDAQ: NVDA) has been commanding attention with its remarkable performance, soaring to become the third most valuable company in the US, trailing only behind tech behemoths Microsoft and Apple. Boasting an impressive 82.24% surge in share price year-to-date, it has outpaced the tech-heavy Nasdaq 100 Index by an astounding tenfold, underlining its dominance in the sector.
Bolstered by eleven consecutive weeks of gains, Nvidia rides the crest of market confidence in Artificial Intelligence (AI) prospects, where it stands at the forefront. The recent financial report further fuelled this momentum, surpassing expectations and showcasing robust growth in both revenue and earnings. Holding a commanding 80% market share in advanced AI chip technology solidifies its position as an industry leader.
However, amidst its stellar run, Nvidia faces potential headwinds this week, with reports of company insiders selling positions contributing to a 4.28% decline week-to-date. This shift raises questions about market sentiment, particularly as investors await the release of the PCE Price Index, a crucial gauge of inflation favoured by the Federal Reserve.
Technical
Nvidia’s share price has been on an upward trajectory, firmly positioned above the 100-day moving average, affirming its uptrend. The presence of an ascending channel pattern further validates this bullish momentum.
Following a minor dip, support materialised at the $850.10 per share level, catalysing a resurgence in buying activity. However, as the share price approached the $967.66 per share resistance level, upside momentum encountered resistance amid declining upside volumes. This culminated in a retracement, leading to back-to-back days of losses.
Presently, the share price has retraced to the 61.80% Fibonacci Retracement Golden Ratio, serving as a potential intermediate support level. Whether this level holds significance hinges on the resurgence of upside momentum. If so, a potential retest of the $967.66 per share resistance level looms on the horizon. Conversely, a breakdown below the Golden Ratio, accompanied by high volumes, could signal sustained selling pressures. In such a scenario, the $850.10 per share support level may come into play once again, potentially serving as a critical level for traders to watch.
Summary
Nvidia’s meteoric rise showcases its dominance in AI technology, surpassing market expectations with an 82.24% surge in share price. Despite recent setbacks, technical indicators suggest potential support at the $850.10 level and resistance at $967.66, underlining its resilience amid market fluctuations. Traders likely await key economic indicators for further cues.
Sources: Nvidia Corporation, Reuters, Koyfin, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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