As one of the most popular investments of 2024, Nvidia (NASDAQ: NVDA) stock caused something of a stir in December as it ended its rally and began plunging.
Specifically, NVDA shares are, at press time on December 18, 4.16% in the red in the last 30 days and, at $134.42, 8.63% below their recent highs.
Though it is difficult to tell for certain if the downturn was spurred on by short sellers, FINRA data retrieved from Fintel reveals investors have been betting against the semiconductor giant relatively extensively in the first half of December.
Picks for you
Still, it is interesting that most of the bets against Nvidia stock came after the decline started on December 5, with December 11, 12, and 13 featuring the highest short ratios at 54.20, 55.62, and 50.90, respectively. The lowest short ratio in the last two weeks was on December 9, when it stood at 34.70.
Despite not being near the highs, the ratio was also relatively hefty on December 17 – the latest available date – as it was recorded at 49.45.
Can Nvidia stock rally reignite before the New Year?
Both the highs earlier in December and the recent cooling in short positions appear consistent with NVDA shares’ recent price action.
Despite still being one of the best-performing stocks of 2024 with a 178.22% year-to-date (YTD) rise, Nvidia has hit a rough patch in December.
Specifically, along with the souring of investor sentiment as the semiconductor giant underperformed other Magnificent 7 companies, geopolitical concerns over a possible trade war with China – and other countries, including Mexico and Canada – are becoming increasingly pointed as Donald Trump’s inauguration draws near.
Should these tensions escalate, Nvidia would be among the more exposed firms due to the extensive rare mineral needs of the industry, as well as the fact that the bulk of the global semiconductor manufacturing is done in Taiwan.
On the other hand, technical analysis (TA) reveals that Nvidia might be setting up for a renewed rally. For example, NVDA shares have been trading in a consistent two-year Channel Up pattern, as reported by Finbold on December 17.
So far, the pattern has served as a fairly reliable framework for the semiconductor giant’s rallies.
Analysts remain bullish about NVDA stock
Furthermore, the latest downturn has not soured analyst opinion about the chipmaker as the most recent price target revisions continue rating NVDA stock as a ‘buy’ while forecasting a continued rally, possibly toward $175 or above.
Finally, it is noteworthy for investors seeking to trade on sentiment that Jim Cramer warned on December 17 that it is not wise to ‘buy Nvidia yet,’ though it is equally worth pointing out that the Mad Money host and former hedge fund manager remains bullish about the company.
Featured image via Shutterstock
