A trading expert has warned that Nvidia (NASDAQ: NVDA) stock’s technical structure is hinting at a possible correction that could see the equity lose the $200 support level and plunge toward $160.
Notably, as of press time, NVDA shares were valued at $215, ending the last session down about 2%, while the stock remains up 14% year-to-date.
The bearish outlook comes despite Nvidia once again surpassing earnings expectations, with the market appearing to have largely priced in the strong results during the stock’s rally in recent weeks.
According to a TradingShot analysis shared in a TradingView post on May 23, Nvidia often rallies ahead of earnings as investors respond positively to results from companies tied to the artificial intelligence supply chain, leaving limited room for additional upside immediately after earnings.
The analysis noted that Nvidia is trading in a weekly Relative Strength Index (RSI) setup similar to early November 2024, just before the stock experienced a sharp pullback.
At the same time, the stock has formed another “higher highs” structure near the top of its rising trend line, a pattern that previously preceded a steep decline.
Based on the current structure, the decline could extend into late July 2026, with Nvidia potentially retracing toward its 100-week moving average (MA). This level previously acted as strong support during the 2025 correction before the stock resumed its broader uptrend.
The analysis projects that a move toward $160 could mark a key medium-term support and possible reentry zone for investors if the historical pattern repeats.
However, the weekly RSI support near 35.50 remains critical, with a breakdown below that level potentially opening the door for a deeper correction.
While Nvidia’s long-term outlook remains supported by strong AI demand, the analysis suggests the stock may be entering a period of heightened volatility following its extended rally above $220.
Nvidia’s blockbuster earnings
Despite the bearish outlook, Nvidia delivered another blockbuster quarter, reporting record fiscal Q1 2027 revenue of $81.6 billion, up 85% year-over-year and 20% from the previous quarter, driven largely by its AI-focused Data Center business, which generated $75.2 billion in revenue.
Adjusted EPS came in at $1.87, beating estimates of about $1.76, while free cash flow hit a record $49 billion.
Nvidia also raised its quarterly dividend to $0.25 per share and approved an additional $80 billion share buyback program.
For Q2 FY2027, the company projected revenue of roughly $91 billion, above Wall Street expectations of $87 billion.
However, the stock slipped after earnings in a classic “sell the news” reaction, pulling back from recent highs near $236.
