Nvidia Stock Faces Critical Support at $123 Amid Mixed Technical Signals: What to Watch Next

The upcoming earnings report, scheduled for release on August 28, 2024, holds the potential to be a pivotal catalyst for the Nvidia stock’s movement. Should the key financial metrics surpass market expectations, we could anticipate a bullish reaction, driving the stock higher. Conversely, a miss on these critical figures could trigger a bearish response, leading to a downward movement in the stock’s price. The outcome of this report is likely to define the stock’s trajectory in the near term.

In June, Nvidia (NVDA) achieved a new all-time high at $140.76. Following this peak, the stock underwent a significant correction, retracing to the 0.382 Fibonacci support level at $91.12. This critical support level held firm, allowing Nvidia to stage a robust recovery, rallying by approximately 36.5%.

Technical Indicators and Trends (Monthly Chart):

• MACD (Moving Average Convergence Divergence): The MACD lines remain bullishly crossed, although the histogram has been ticking lower, indicating a potential slowdown in bullish momentum.
• RSI (Relative Strength Index): The RSI continues to reside in overbought territory with no signs of bearish divergence, suggesting sustained strength in the current uptrend.
• EMA (Exponential Moving Average): The golden crossover of the EMAs confirms a long-term bullish trend, further solidifying the positive outlook for Nvidia.

Despite this strong technical backdrop, it’s worth noting that Nvidia experienced a sharp pullback earlier this month, from which it has since rapidly recovered, highlighting the resilience of the stock in maintaining its upward trajectory.

After rebounding strongly from the 0.382 Fibonacci support level at $91.12, Nvidia stock has climbed to the critical golden ratio resistance at $123. A decisive close above this level could propel the stock towards its all-time high around $141, or potentially even higher. However, if Nvidia faces rejection at this resistance, it may retrace back down to the 0.382 Fib support at $91.12. Additionally, the stock finds substantial support at the 50-week EMA, currently positioned at $86.4.

Technical Indicators and Trends (Weekly Chart):

• MACD (Moving Average Convergence Divergence): The MACD remains in a bearish crossover, though the histogram has begun ticking bullishly higher since last week, indicating a possible shift in momentum.
• RSI (Relative Strength Index): The RSI is oscillating in neutral territory, approaching overbought levels but not yet providing a definitive signal.
• EMA (Exponential Moving Average): The golden crossover of the EMAs reinforces a mid-term bullish trend, suggesting a generally positive outlook despite the recent pullback.

Despite these mixed signals, Nvidia’s strong bounce off the Fibonacci support level presents a bullish scenario in the weekly chart, hinting at potential upward momentum.

Nvidia has now found significant support at the previously breached golden ratio level of $123. If Nvidia successfully maintains this support, it signals potential for further upward momentum. However, if Nvidia breaks down bearishly from this level, the stock’s next key Fibonacci support levels are at $115 and $105. Additionally, the 50-day EMA at $116 provides further support, reinforcing the overall structure.

Technical Indicators and Trends (Daily Chart):

• MACD (Moving Average Convergence Divergence): The MACD lines have crossed bullishly, but the histogram has been trending lower over the past two days, indicating a potential slowdown in momentum.
• RSI (Relative Strength Index): The RSI remains neutral, providing no strong directional signals at this time.
• EMA (Exponential Moving Average): The golden crossover of the EMAs continues to confirm a bullish trend in the short-to-mid term, supporting a generally positive outlook despite recent market fluctuations.

Despite recent pullbacks, Nvidia’s ability to hold above the $123 level could serve as a foundation for continued bullish movement.

Technical Indicators and Trends (4H Chart):

• MACD (Moving Average Convergence Divergence): The MACD lines are on the verge of a bearish crossover, with the histogram trending downward, signaling weakening momentum.
• RSI (Relative Strength Index): The RSI remains neutral, providing no clear directional bias at this time.
• EMA (Exponential Moving Average): Despite the current bearish signals, the golden crossover of the EMAs confirms a bullish trend in the short term, suggesting that further gains are still possible if key support levels hold.

This mix of indicators reflects a cautious outlook, where the short-term bullish trend could persist, but only if Nvidia manages to stay above the critical support level at $123.