2024-08-07 01:30:02
Key Takeaways
- Nvidia shares rose in premarket trading Tuesday, a day after dropping more than 6% amid a broad-based market selloff and following reports that the company’s highly anticipated Blackwell chips will be delayed by at least three months due to design flaws.
- While the chipmaker’s stock price recovered from its session lows on Monday to close above the key $97 support area, it remains precariously positioned roughly midway between the 50- and 200-day moving averages.
- Nvidia shares may find support around $75 and $51, but could run into resistance near $116 and $136.
Nvidia (NVDA) shares gained ground in Tuesday’s premarket trading session, a day after dropping more than 6% amid a broad-based market decline and following reports that the AI darling’s highly anticipated Blackwell chips will be delayed by at least three months due to design flaws.
Since hitting a record high on June 18, Nvidia shares have fallen 26% as investors cash in on chip stocks over worries about tightening export curbs with China and elevated valuations driven by the AI narrative that has gripped Wall Street following OpenAI’s release of ChatGPT in November 2022.
Below, we analyze Nvidia’s chart and point out key support and resistance levels to watch out for as the company navigates ongoing market volatility.
Nvidia’s Stock Price at a Crossroads
While the chipmaker’s stock price recovered from its session lows on Monday to close above the key $97 support area, it remains precariously positioned roughly midway between the 50- and 200-day moving averages (MAs) amid the likelihood for further short-term market fluctuations.
The stock was up 3.4% at $103.90 in premarket trading Tuesday about two hours before the opening bell.
Key Support Levels to Monitor
If Nvidia shares fail to hold the key $97 support area, investors should eye two important levels where the price may attract buying interest.
The first sits at $75 just below the 200-day MA, an area on the chart where the price may encounter support from a horizontal line linking the February peak with the April swing low.
A breakdown below this level opens the door to a sell-off down to around $51, where the shares would likely see bulls defend three peaks in the stock, two of which marked prior record highs, between August and December last year.
Watch These Important Resistance Levels
If the stock holds the $97 level, it’s worth monitoring two crucial price levels where the shares could run into overhead selling pressure.
Firstly, the price would likely find resistance around $116 from a range of comparable trading levels that formed on the chart between May and early August. This is also an area of interest, given it sits in close proximity to a failed retest of the 50-day MA earlier this month and the 50% Fibonacci retracement level using a grid stretched from the June high to August low.
A rally above this level could act as a catalyst for follow-though buying up to the $136 area, a location where sellers may look to book profits near the stock’s record close, which also aligns with the July swing high.
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