The Nasdaq Composite closed high, as well as the other stock indexes, thanks to Nvidia’s (NVDA) stock overperforming.

While Nvidia’s stock is outperforming everyone else, this cannot last forever. The upward trending stock has managed to rally since January 6^th, where its base was flat.

It is worth noting that the stock dropped significantly on February 16^th and stayed down for several days. But the sharp rally this Wednesday has been what is making the news.

This is why we warn caution in this stock and tell traders that it cannot stay bullish forever. Nvidia’s stock price will fall, and probably very soon. While the AI chip manufacturer has plenty going for it, interest will eventually wane and move to other stocks that are performing well.

Stocks with long histories like Microsoft, Meta, and Google are all expected to do well this year. At different points in 2024 they have already shot to the top of the stock charts and will likely do so again. They may be better long-term investments, but day traders can find a favorable position with Nvidia for now and likely still see incredible gains.

Market Outlook

The markets closed high on Thursday and are set to be off to a good start at the beginning of the trading session on Friday. However, they could quickly fall from that elevated position as traders sell off their shares and reap the gains they have made.

If the market does dive Friday, Nvidia will probably take a hit. We may specifically see fallout for this tech stock because of how high it has traded recently. The price could easily deflate incredibly fast as traders walk away from the stock with their profits.

Nvidia likely has a bright future on the market for the remainder of 2024, but because it is the breakout stock right now, interest will wane very quickly. This stock is in a precarious position that could change at any moment.

Last week, the SCMI stock performed poorly and pulled down other tech stocks, like Nvidia. Because Nvidia is doing so well, it is pulling up other tech stocks around it, but when one of them falls, they may pull Nvidia back down. Traders should be watching not just Nvidia but other technology stocks as well to see where the market might be going.