Nvidia at a Crucial Turning Point

Nvidia Corp. is one of the largest and most watched semiconductor stocks. You may remember, just three short years ago the stock was trading in the $20 range before surging over 1000% to top out in October 2018 at $292, just shy of the $300 level. The stock is down over 50% from its peak and is currently trading around $148. There has been a lot of chatter about this level and how the stock is at a key inflection point for the stock.

Here’s a great tweet from J.C. Parets, founder of All Star Charts, a technical analysis research platform. The chart he provides illustrates the importance of this level. Parets makes it clear that $152 is the line in the sand. If it’s able to hold above that level he expects price to mean revert. In this case, it would be reasonable to use the 200-day moving average as a target. On the other hand, if Nvidia can’t hold the $150 level he thinks the stock could plummet lower.

Chart watcher Aaron Jackson (@ATMcharts) offers another reason why this is such a key level for Nvidia. In the tweet above, he explains that the stock is testing the 50-day moving average. As of today’s close, the 50-day moving average sits at $154.12. These popular moving averages can often act as resistance when broken, however, it would be a very bullish signal if the stock is able to close above the 50-day moving average.

J.C. Parets and Aaron Jackson aren't predicting the direction Nvidia will resolve but rather, they stress the polarity of the $150 level. It’ll be interesting to keep an eye on this level as well as the 50-day moving average in the next few days. How the stock behaves here will give us a better idea of where it might trend in the intermediate term.