The price action on the NVDIA (NVDA) chart over the last several weeks has been very constructive. The stock has been consolidating above a nearly one year uptrend line, and now it looks like it is breaking out.
The first chart shows the consolidation in the form of a small channel pattern, situated between 50 day moving average resistance and the uptrend line support. NVDIA became oversold after its early June drop and now the stochastic oscillator is making a bullish crossover and moving out of its oversold zone.
One concern, however, is volume. The weekly chart shows the steady decline in volume and positive money flow this year. But there have been similar periods of volume and money declines that have had little effect of the trajectory of the stock price.
NVIDA gapped open this morning above its 50 day moving average. If this remains the low for the session it will have established an island bottom at support. The island is the recent consolidation period delineated by the gap lower and below the 50 day average, and the gap higher and above the 50 day average.
This would suggest higher prices and a retest of rising triangle resistance.