Nvidia Stock Falls $100 After New Record Highs in S&P 500, Nasdaq

Stock markets continued the surge on Friday, with Nvidia stock approaching $1,000, while Nasdaq and S&P 500 printed a new record high. But, in the US session, we saw a sharp reversal, which sent stock indices down off the day, while NVDA stock price dived $100 lower.

The S&P 500 index lost around 0.7% to end the week at 5,123 points, while the Nasdaq Composite closed at 16,085. The blue-chip Dow Jones Industrial Average retreated 250 points off the highs to finish at 38,723, so all three major indexes closed the tumultuous week lower.

Nvidia was among the main losers, as NVDA shares went through a remarkable surge, rising from $472 to reach a high of $974, so it increased more than twice in value so far this year, which has been unprecedented in market history. At its peak today, Nvidia’s market cap rivaled that of Apple, positioning it as the world’s second-most valuable company.

Ndivia Chart Daily – The Biggest Daily Drop Ever

However, this bullish trend abruptly reversed in the last trading session on Friday, as the market activity seemed to be driven by a round of profit-taking, which sent the Nvidia stock price plummeting by more than 10% from the top. This pessimistic sentiment has also impacted other high-flying stocks, however this is not a phenomenon typically associated with the end of a bull market, but rather some profit-taking ahead of the weekend after such a rally.

But, such corrections can persist for a significant duration, so we won’t try to catch a falling knife. We will wait for the decline to end and then go long in Nvidia and one of the stock futures indices, especially if we see a bullish reversing signal, such as a doji or candlestick.  The first potential to go long would be the 20 SMA (gray) on the daily chart, which has acted as support before. It stands below $800 now, so we will follow the price action down there to see if the selloff will be over and then buy NVDA shares.

S&P 500 Live Chart