Nvidia May Have Found Its Interim Bottom

• Nvidia has corrected as much as 24.48% from its all-time high of $140.76.

• Its current price of $112.28 is still trading 20.23% lower than its all-time high.

 Why $106.30 Could Be the Interim Bottom for Nvidia?

1) 127.2% Fibonacci Extension Support Level: Fibonacci Extension suggests a major support level at $107.25 (127.2% Fibonacci level). Yesterday's intraday low hit this level and rebounded to $112.28, indicating that the 127.2% Fibonacci level may hold (see Graph 1).

Source: Tiger Brokers

2) Doji Reversal:

Yesterday's candlestick formed a classic single doji reversal pattern (see Graph 2).

Source: Tiger Brokers

3) Closing the Gap: The low of $106.30 may represent bears trying to close the previous gap at $106.47 from May 24 (see Graph 2).

4) 38.2% Fibonacci Extension Level: Fibonacci Extension suggests that $107.51 is a major support level (see Graph 3).

Source: Tiger Brokers

 What If Nvidia Stock Drops Further?

• $100 is an Important Psychological Support Level

• Another Major Support at $96: Nvidia previously gapped up on May 23. Further weakness in share price could bring Nvidia closer to $96.02 to close the previous gap (see Graph 4).

Source: Tiger Brokers

 Conclusion:

• All in all, the current price level appear attractive based on technical analysis.

• However, I will turn short-term bearish if the share price closes below $106.

• The next major supports are $100 and $96.02. These support levels could be good accumulation points if you have a long-term constructive view on Nvidia.

• Bloomberg analysts' consensus currently shows a 12-month target price of $140.15, representing an upside of 24.8% relative to yesterday’s closing price of $112.28.

Source: Bloomberg, 26 Jul 2024