Nvidia’s recent earnings report had initially sparked optimism among investors, but the stock’s subsequent performance has taken many by surprise. Despite strong results, shares experienced a volatility not seen in the last two years as they sold off before the earnings announcement, which marked a shift from previous patterns where the stock had rallied leading up to results.
Upon the announcement, Nvidia shares opened at $195.95 and reached a brief peak at $196 before reversing course. This sharp turn highlighted a bearish engulfing pattern, raising concerns about the stock’s trajectory in the coming days. Traders had hoped the initial gap would hold and signal a resurgence towards the $210 mark, but now they find themselves reassessing the situation in light of Thursday’s market activity.
Historically, Nvidia has bounced back from oversold conditions, typically seen when the Relative Strength Index (RSI) dips below 35. Currently, it’s crucial for investors to watch for consolidation around its 50-day moving average, especially as this pattern has often preceded upward trends following strong earnings.
The stock’s resistance is pegged at Thursday’s high of $196, while downside support is expected around the $175 mark. Market volatility has been a factor, and with Bitcoin’s decline and Federal Reserve uncertainties weighing heavily, investors are reminded of the potential for further declines if support levels are breached. A drop could see shares testing the 200-day moving average around $153, although many view this as a potential buying opportunity, given Nvidia’s strong fundamentals.
In summary, while the current price action is challenging, Nvidia’s robust earnings and guidance offer a positive outlook for long-term investors. Patience may be key as the company works through these fluctuations, and the resilience of its business model should provide a hopeful path to recovery.