Technical Analysis for NVIDIA Corporation (NVDA) August 21, 2024Based on the latest chart you provided, here’s a detailed technical analysis of NVIDIA (NVDA) for tomorrow and the rest of the week.
1. Trend Analysis
Channel: The price of NVDA is currently moving within an ascending channel, which indicates that the overall trend is still bullish. The price is closer to the lower boundary of this channel, suggesting a potential bounce back if the trend continues.
Ichimoku Cloud: The price is currently interacting with the Ichimoku Cloud. Typically, if the price remains above the cloud, it suggests bullish conditions, while below the cloud indicates bearish momentum. The price appears to be inside or near the edge of the cloud, which can be seen as a support area in a bullish scenario.
2. Support Levels
$125.88: This level is an immediate support level. If the price holds above this level, it could signal a continuation of the uptrend within the ascending channel.
$120.36: This is a stronger support level. A break below this could lead to a bearish move towards the lower levels. It's close to the lower boundary of the Ichimoku Cloud, adding strength to this support.
$97.37: This is a long-term support level, which is quite far from the current price. This would likely only be relevant in a significant bearish scenario.
3. Resistance Levels
$129.93 - $130.00: This is the immediate resistance level. Breaking above this could indicate a continuation of the uptrend and may attract more buyers.
$137.31: If the price manages to break above $130.00, this is the next resistance level to watch.
$140.99: This level is higher and represents a significant psychological and technical barrier.
4. Indicators
Volume: The volume has been relatively low, which might indicate a consolidation phase or lack of strong buying/selling interest at the current levels.
Moving Averages: If you’re using the 15 EMA (yellow line) and 161 EMA (purple line), check their interactions with the price. Crosses between shorter and longer EMAs can often provide buy or sell signals.
5. Trading Strategy
Bullish Scenario:
Entry Point: Consider entering a long position if the price bounces off the $125.88 support level with confirmation, such as a bullish candlestick pattern or a strong bounce on the 1-hour chart.
First Target: $130.00 - Secure partial profits here if the price tests this level.
Second Target: $137.31 - If the bullish momentum continues, this level could be your next target.
Stop-Loss: Place a stop-loss below $125.00 to protect against unexpected bearish moves.
Bearish Scenario:
Entry Point: If the price breaks below $125.88 and closes below the lower boundary of the Ichimoku Cloud, consider entering a short position.
First Target: $120.36 - This would be the immediate target if bearish momentum picks up.
Second Target: If $120.36 breaks, the next significant support is at $97.37, although this is a more extended move and may not happen within the week.
Stop-Loss: Place a stop-loss above $130.00 to protect against potential upside breakouts.
6. Market Conditions
Earnings: Note that there is an earnings report (indicated by the “E” on the chart) on August 27th. Be cautious with positions going into earnings as the price can become highly volatile.
Overall Sentiment: The semiconductor sector, which includes NVDA, has been under both technical and fundamental scrutiny. Pay attention to broader market sentiment, especially related to tech stocks.
Conclusion
For tomorrow and the rest of the week, NVDA is at a critical juncture. Watch for how it interacts with the $125.88 support level and whether it can break through the $130.00 resistance level. Employ appropriate risk management and be mindful of the upcoming earnings report, which could add volatility to your trades.
