By the end of the week, Nvidia's stock has surged to $120, with the strong bullish movement likely driven by positive results from its largest supplier. Taiwanese company Hon Hai Precision Industry (Foxconn) reported revenues exceeding $30 billion and announced plans to establish the world's largest chip manufacturing plant in Mexico, aimed at improving supply efficiency for its main client, Nvidia. This news has restored investor confidence in the short term, and if this positive momentum persists, the bullish pressure surrounding the stock could intensify further.
Large Bearish Channel:
Despite the recent confidence in Nvidia, it is important to note that since early January, the stock has been forming a large bearish channel, and its current price remains midway within that channel. This suggests that the short-term buying momentum still has room to grow, but it has not yet been strong enough to break the dominant bearish formation.
RSI Indicator:
The RSI indicator has started showing an upward slope, and the RSI line is preparing to cross the neutral 50 level. This could indicate that buying momentum may begin to take control, especially if the RSI line continues to move consistently above this neutral level in the upcoming sessions.
MACD Indicator:
The MACD histogram is showing a similar pattern, as it is currently testing the neutral 0 line. If a crossover occurs, it would suggest that the moving average trends are turning bullish, potentially reinforcing buying confidence in the following sessions.
Key Levels:
By Julian Pineda, CFA – Market Analyst
Large Bearish Channel:
Despite the recent confidence in Nvidia, it is important to note that since early January, the stock has been forming a large bearish channel, and its current price remains midway within that channel. This suggests that the short-term buying momentum still has room to grow, but it has not yet been strong enough to break the dominant bearish formation.
RSI Indicator:
The RSI indicator has started showing an upward slope, and the RSI line is preparing to cross the neutral 50 level. This could indicate that buying momentum may begin to take control, especially if the RSI line continues to move consistently above this neutral level in the upcoming sessions.
MACD Indicator:
The MACD histogram is showing a similar pattern, as it is currently testing the neutral 0 line. If a crossover occurs, it would suggest that the moving average trends are turning bullish, potentially reinforcing buying confidence in the following sessions.
Key Levels:
- $130 – Significant Resistance: This level coincides with the bearish trendline and the 38.2% Fibonacci retracement level. A breakout above this level could challenge the current bearish channel and pave the way for stronger buying momentum.
- $115 – Near-term Support: This level aligns with the 61.8% Fibonacci retracement barrier. If bearish oscillations push the price below this level, it could completely negate the current buying sentiment and extend the long-term bearish trend that has persisted for weeks.
By Julian Pineda, CFA – Market Analyst
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.