Hello traders! Since March this year, NVIDIA has been going through a consistent uptrend. But early September, when the price touched $589 high, a sharp decline followed. During the past 3 months, NVIDIA has been going through a consolidation phase, where it produced a double top at $589. At the same time, the price has shown some weakness, while it broke below the uptrend trendline and 50 Exponential Moving Average.
Currently, NVIDIA is trading at the $542 resistance, which is confirmed by two Fibonacci retracement levels, 23.6% and 61.8% as can be seen on the chart. If this resistance will continue to be respected, price is likely to initiate a correctional move down, which eventually might even result in a long term trend reversal.
While it is too early to talk about the downtrend, NVIDIA is likely to test the $413 support level, and perhaps will even spike towards the key psychological level at $400. This support is confirmed by 88.6% Fibs, applied to the last corrective wave down, prior to the August rally. It also corresponds to the 200 EMA as well as the average-price uptrend trendline.
Finally, Fibonacci cycles show, that in the next 48 hours a new cycle might start. And if the current resistance will hold, it will be a bearish cycle for NVIDIA. All-in-all, a 22% price drop could take place, but for this scenario to become the reality, NVIDIA must not go above the $589 resistance.
Bias: Strongly bearish while below $542
Potential Resistance Zone: $540-560
Potential Targets: $413
Have a profitable trading!