- Summary:
- Nvidia share price rally flashed signs of exhaustion on Tuesday, with investors confidence around the AI stock taking a hit in recent days.
Nvidia stock price rally paused on Tuesday, snapping a winning streak that had seen its value rise by $765 billion in the previous eight sessions. Moreover, the stock was down by a marginal -0.06 percent in Wednesday’s premarket session at the time of writing, signifying investor jitters around its earnings release set for Wednesday, August 28.
Nvidia (NASDAQ: NVDA) nearly dropped below the psychological $100 support mark on August 5 as uncertainty surrounding the US economy exerted pressure on the market. It bounced back after hitting $100.15- the lowest level since its stock split two months earlier. A return above the $120 stock split price is certainly a confidence-booster, but there’s an underlying FUD sentiment around the future prospects of AI stocks.
Many investors opine that Nvidia’s current stock price is probably overvalued, bearing in mind the limited gains made in the AI tech front in recent months. That potentially explains why NVDA is down just a week before its earnings release for the quarter ended July 2024. Many investors expect underwhelming earnings figures next week, and this is evidenced by the stock’s unusual leaning to US macroeconomic figures- something not seen for the most part in the last year.
NVDA was the stock market bellwether for the most part of the second quarter of 2024. That said’ Nvidia rival, AMD’s performance in recent days signals a significant degree of upbeat sentiment around AI-driven stocks. Meanwhile, Fed chairman Jerome Powel’s speech on Friday could inject fresh volatility across stock markets.
Momentum indicators
Nvidia stock price has recently been on a downward trajectory as seen on the 2-hour chart. In addition, it has broken below the middle Bollinger Band, signaling bearish control. However, the RSI indicator reading is at 59, which points to a potential bullish undercurrent.
Nvidia price support and resistance levels
The bears will have control of NVDA price momentum below the 127.20 pivot mark. That will likely see the establishment of the first support at 125.70. However, the sellers could breach that mark and test the next support at 124.40 if they extend their control. Conversely, moving above 127.20 will signal control by the buyers, in which case the upside momentum could encounter the first resistance at 128.65. However, if they extend their control, the upside momentum could breach that level, invalidate the downside narrative and potentially test 130.00.
