Nvidia (NASDAQ: NVDA) is treading on thin ice as it flirts with a critical support level.
Currently trading at $138.68, up 0.98% on the day, the stock is down over 5% for the past month and showing signs of vulnerability.
If NVDA breaks below the $132 mark, technical analysts warn it could be lights out for the AI chip giant’s near-term momentum.
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Head and Shoulders pattern in play
A head-and-shoulders formation has emerged, signaling potential trouble ahead. This bearish chart pattern suggests a reversal may be imminent if the $132 support level fails to hold.
The trading range over the past month — between $131.80 and $152.89 — highlights the volatility Nvidia has faced. Currently, the stock is consolidating near the middle of this range, offering potential entry points but also cautioning traders of potential downside risks.
NVDA is clinging to a support zone that stretches from $135.06 to $137.33. Should this zone give way, the path to $132 becomes alarmingly clear.
On the flip side, resistance hovers between $139.32 and $140.95, formed by multiple trend lines and significant moving averages. Breaking through this resistance could offer Nvidia a chance to reclaim higher ground, but a failure to do so leaves it vulnerable.
Trading expert weighs in on NVDA shares
The outlook from analysts remains cautiously optimistic, provided NVDA holds its current support range. TheTradingChamp commented:
“NVDA, this one is still looking bullish. As long as we hold this $135-140 zone, I will not be looking for any downside. Price target is still $150 from these levels. Invalidated below $135.”
A drop below $135 could invalidate bullish setups and set off further declines, while a break below $132 could open the floodgates for a steeper correction.
Despite trading near the upper end of its 52-week range, Nvidia’s recent performance has lagged behind the S&P 500, which is hovering near new highs.
While Nvidia’s long-term AI growth story remains compelling, short-term technicals suggest that caution is warranted.
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