Key Takeaways
- Nvidia shares performed better than other Magnificent Seven stocks on Thursday, after surging by 6% in the previous session. Investors were looking for dip-buying opportunities.
- Since setting a record high in early January, the stock has traded within a descending channel, with the price recently finding buying interest near the pattern's lower trendline.
- Investors should watch key support levels on Nvidia's chart around $105 and $96, while also monitoring important resistance levels near $130 and $153.
Nvidia (NVDA), after a 6% surge in the previous session, held up better on Thursday than other Magnificent 7. Investors have been looking for dip buying opportunities.
Since late January, the AI leader has been under pressure after AI competition in China sparked concerns about technology giants overspending on infrastructure that Nvidia provides. Recent concerns about tariffs, inflation, and further export restrictions have also dampened sentiment.
The recent price increase coincided with a report stating that Taiwan Semiconductor Manufacturing Company had approached the chipmaker along with Advanced Micro Devices, Broadcom and Broadcom (AVGO) to form a joint venture in order to own and manage Intel’s foundry division (INTC).
On Thursday, Nvidia shares closed 0.1% lower at $115.58, while its Mag 7 counterparts all fell sharply amid a broader sell-off that sent the S&P 500 into correction for the first time since 2023. Nvidia’s shares are down by 14% since the beginning of the year. The lion’s share of this loss occurred over the past month.
Below, we examine Nvidia’s chart in greater detail and apply technical analysis so that we can identify key price levels which investors may be monitoring.
Descending Channel Takes Shape
Since the record high set in early January, Nvidia share prices have been trading in a descending trend, with volume increasing in the second part of February.
Recently, the stock has found buying interest near the lower trendline of the channel, coinciding a rise in the relative Strength Index (RSI) when the indicator returns to neutral territory.
Investors should be on the lookout for a death cross as the 50-day MA approaches the 200-day MA. This is a warning sign that further declines are likely.
We can identify key levels of support and resistance on Nvidia’s chart which could be important in future price swings.
Key Support Levels To Watch
The first important level of support to watch is $105. This area, which is currently near the lower trendline of the descending channel, could attract interest from buyers near the lows of this month and September’s trough.
If the shares close below this level, they could return to their lower support at around $96. Investors could look to buy shares in this area near the March twin peaks of last year, which are closely aligned with the early August swing-low.
Monitor important resistance levels
After a move upward, it is worth watching how the shares respond at the $130 level. This area may have overhead selling pressure around the upper trendline of the descending slanted channel, the moving averages, and several peaks, troughs, and peaks on the chart dating back to last June.
Nvidia’s shares could reach around $153 in the future. Investors who bought at lower prices might look for exit points near several peaks located just below the all-time high.
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