Chart of the Day - Wednesday, October 18, 2023

Today’s Chart of the Day was shared by Bespoke (@bespokeinvest). Nvidia ($NVDA) is up a whopping +189% year-to-date, making it the best-performing stock in the S&P 500. However, many have pointed out that it's formed a Head and Shoulders top. It peaked in late August and formed the right shoulder last week. This bearish pattern will be confirmed if price closes below the neckline, around $400. Using the height of this pattern, a measured move price target suggests a ~20% decline to retest the breakout level, around $330. $NVDA gapped above $330 after its earnings report in May, and it hasn't touched the gap since. That breakout in May kicked off the entire AI frenzy, but $NVDA could give it all back if it confirms this bearish pattern.