Nvidia (NASDAQ: NVDA) stock has traded in the red for the last two trading sessions, and technical indicators suggest investors should anticipate further downside.
This projection stems from Nvidia’s recent price movement, which saw the stock hit a “touch of death,” signaling possible declines ahead, according to an analysis shared by stock market expert Peter DiCarlo in an X post on September 18.
DiCarlo explained that the “touch of death” is triggered by the BX Trend, an indicator reflecting a stock’s buy and sell pressure. The touch occurs when Nvidia’s price forms lower highs, signaling that bullish momentum is fading and money is flowing out of the stock.
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To validate this projection, the expert pointed to three occasions where this pattern led to significant corrections in Nvidia’s stock, with sell-offs ranging between 7% and 20%.
In prior instances, such as in August, the stock sold off by 20% before recovering. DiCarlo cited these historical examples as reasons for caution, suggesting the current setup is eerily similar.
Although bearish, the “death touch” signals a short opportunity, where traders would profit from a decline, just as Nvidia begins to show lower highs.
NVDA stock price prediction
The technology giant is also witnessing price compression, where higher lows are met with lower highs, creating a squeeze in the stock that is likely to break one way or the other. If Nvidia can push through the resistance level of $125, the expert noted that it could retest its all-time highs. However, a break below support could lower the stock to $105–$110, or worse.
DiCarlo predicted that Nvidia may consolidate further, potentially building momentum for a breakout later this year. Despite the current bearish signals, the analyst was optimistic, suggesting the stock could hit new highs by November if the bullish compression holds.
Meanwhile, the semiconductor manufacturer ended the latest trading session down about 1% for the day, with a valuation of $115. Although NVDA is struggling to break the $120 resistance, the stock still benefits from the company’s venture into the artificial intelligence (AI) scene, gaining almost 140% in 2024.
The short-term bearish sentiment may extend ahead of the market opening on September 18, with pre-market trading data indicating that NVDA is down 0.6%.
NVDA key price levels to watch
In this line, stock trading expert Henry James, in an X post on September 18, provided key price levels to watch for the short term. He pointed out that a move above $118.04 could see a NVDA target of $120.79, with further resistance at $123.10 and $124.40.
A break above $124.40 would likely signify a reversal of the current downtrend, opening the door to higher targets at $130.75, $132.42, $136.15, and $140.76.
On the downside, NVDA could find support at $115.38, $111.92, and $108.80. The golden pocket—a critical Fibonacci retracement zone—between $99.40 and $106.20 is a critical area to watch.
Nvidia is showing short-term bearishness despite the company pointing out it is witnessing a surge in demand for its AI chips. For the long term, analysts at Morgan Stanley (NYSE: MS) believe the stock has a high target of $144, citing potential increased demand for the company’s Blackwell chips.
In summary, Nvidia is facing a short-term bearish pressure, and there is a need for a cautious approach as the equity battles key resistance and support levels. However, despite the current downward momentum, the chipmaker’s strong position in the AI market and the optimistic outlook from analysts suggest there could still be a significant upside in the longer term, even as elements such as the upcoming Federal Reserve interest rate cut remain at play.
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