What’s Ahead For NVIDIA?

By | March 26, 2019

NVIDIA (NVDA) shares have finally broken above the $170 level. They had been trading just below their $170 to $160 range, and made multiple breakout attempts since November last year.

This resistance was created by the large gap lower in November, and it remains unfilled. But it looks like NVIDIA is attempting to close it by returning to the $195 level.

What happens then? The possibility of a pause or pullback is pretty good because the $195 target objective is also, the lower end of a resistance zone. This zone is defined by multiple levels of reinforced resistance.

Here’s the architecture of the resistance zone.

The $195 level closes the gap and often when gaps are filled a stock price will reverse direction. Then there is the $200 level, a large round number. It sounds ridiculous but there is psychological component to technical trading that says round numbers have a support or resistance quality.

Currently, the 200 day moving average is located at the $207 level which is also the 50% Fibonacci retracment level of the 2018 high and low range.

Lot’s of resistance for a potetially fatigued stock to penetrate.

If NVIDIA shares can return to the upper end of the resistance zone at $210, it would be a 65% move off its lows early this year. An incredible recovery in such a short time.

Again, as I said in the previous piece on Apple, investors who suffered through last year’s October to December decline, may be happy to have recovered half their losses. And traders who caught the bottom, may be happy to book those profits.

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