NVDA Bear/Bull tomorrow 8/20/2024NVIDIA (NVDA) recently reported strong earnings for Q2 2024, achieving record revenues of $30.0 billion, up 122% year-over-year. Despite these impressive figures, the stock has faced significant volatility, reflecting a complex market reaction that has disappointed many investors.
Market Reaction and NVDA's Position:
Price Action: After the earnings report, NVDA experienced a notable drop, which suggests that while the financial results were robust, the market may have priced in high expectations. The stock's decline indicates that traders might have been looking for even more optimistic guidance or perhaps were cautious due to the broader market environment.
Trend and Technical Analysis: On the 1-hour chart, NVDA shows a clear downtrend, marked by lower highs and lower lows. The stock has fallen below key support levels, with $123.09 and $118.15 being critical points to watch. The current price action suggests a bearish sentiment in the short term, with the possibility of further downside if it breaches the next support at $114.94.
Support and Resistance: The upper resistance around $136.20 and $131.26 could serve as significant hurdles if NVDA attempts a recovery. If the stock continues to struggle below these levels, it may indicate persistent selling pressure.
Volume and Momentum: The declining momentum and trading volume further confirm the bearish outlook. If the stock does not find support at the current levels, it could test lower supports, with $97.16 and $90.78 as possible targets.
*Despite the recent decline, NVDA remains a leader in the tech sector, especially in AI and data centers. The long-term growth potential is still intact, and the current dip could present a buying opportunity for those with a long-term horizon.
*For short-term traders, it's essential to be cautious due to the stock's volatility. The upcoming long weekend (Labor Day) could lead to lower liquidity, which might exacerbate price swings. It's advisable to set strict stop-loss orders and be mindful of potential market gaps when trading resumes after the holiday.
Overall, while the short-term outlook for NVDA seems challenging, the company's strong fundamentals and leadership position in key growth areas like AI suggest that the current pullback could be a temporary reaction, offering opportunities for disciplined traders.
