Watch these Nvidia price levels following recent stock price swings

Shares gained nearly 16% last week

Key recommendations

• Shares of Nvidia are likely to remain on watch lists on Monday after the AI ​​investor’s darling rose last week as investors took stock of the stock’s recent decline.

• The stock moved towards the top line of a descending channel, although the move occurred on light volume, indicating a lack of institutional activity.

• Investors should monitor key price levels across the board on Nvidia’s chart at $126, $136 and $166, while watching for important lower price levels at $97 and $75.

Nvidia (NVDA) shares are likely to remain on watchlists on Monday after artificial intelligence (AI) bulls surged last week as investors took a recent dip in the stock following upbeat comments from Wall Street pointing to opportunities for continued growth amid insatiable demand for AI infrastructure.

Last week, shares of the AI ​​chip maker gained nearly 16% after falling about 23% between late August and early September, as investor optimism about AI cooled after the company posted a slowdown in quarterly growth, despite beating analysts’ expectations on earnings and sales. However, market sentiment received a boost recently after Bernstein analysts called Nvidia the “best way to play AI,” while Bank of America analysts noted earlier this month that the recent pullback presents an “opportunity of improved purchasing”.

Below, we’ll take a close look at Nvidia’s chart and use technical analysis to identify important price levels to watch out for after the stock’s recent swings.

Actions traded within the down channel

Since setting a record high in late June, Nvidia shares have traded in a bearish channel, a chart pattern consisting of two sloping parallel trend lines that indicate a downward trend in the stock.

More recently, the price made a move towards the top trendline of the channel, retrieving the 50-day moving average (MA) in the process.

However, similar to the rally in August, the stock’s latest advance came on thin volume, indicating a lack of participation from institutional investors. The stock gained 15.8% last week and closed Friday at $119.10.

General price levels to monitor

The first key area to monitor on the chart is around $126, where the stock may encounter resistance near the top trendline of the descending channel. It is also worth watching for increased trading volumes at this level, which may signal a breakout looming above the pattern.

If a breakout occurs, investors should look to the $136 region, a location where sellers can lock in profits near the stock’s record close on June 18, which also closely matches the swing high since mid-July .

The story continues

To estimate a price target above Nvidia’s all-time high (ATH), we can use the measurement principle. To do this, we calculate the distance between the two trendlines of the descending channel and add that amount to the upper trendline of the pattern. For example, we add $40 to $126, which predicts a bullish target of $166.

Lower price levels to watch

If Nvidia shares decline from current levels, investors should keep an eye on the $97 region, an area where the stock may find support near a horizontal line connecting March’s twin peaks with a series of comparable trading levels positioned around last month’s low.

Further selling could lead to a break below the lower trend line of the channel and the 200-day MA, which could see the stock return to the $75 area, a chart location that would likely attract bargain hunters near the top of mid-February and the threshold of April.

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At the time of writing, the author does not own any of the above securities.

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