Nvidia (NASDAQ: NVDA) has been successfully riding the artificial intelligence (AI) wave this year, returning 197% year-to-date to investors.

However, the technical charts show price reversal patterns that are likely to stop further advances in the near term.

NVDA stock technical analysis

After the Nvidia stock made new highs, Finbold mentioned a couple of weeks ago that a pullback is likely to follow next. We provided two support levels: $435 and $400. The first has already been reached and it failed to hold the price.

On the daily chart, NVDA is trading in a descending channel, which is often a bullish pattern and the price breaks out higher. The current price of $425 coincides with the 50-day simple moving average, which makes it a short-term support level.

A break of this level makes reaching $400 almost a certainty.

NVDA stock daily price chart. Source: StockCharts.com

Depending on how the AI stocks will trade this year as well as the global macro environment, there is a potential of testing the $350 price level as well. 

Nvidia is still crushing it

China’s internet giants — Baidu, TikTok-owner ByteDance, Tencent, and Alibaba — have made orders worth $5 billion of Nvidia chips and graphics processing units (GPUs) to be delivered in 2024. The companies ordered A800 chips, which are a weakened version of the A100 for data centers. This is due to export restrictions imposed by Washington last year.

On August 8, Nvidia revealed its latest version of the GH200 Grace Hopper Superchip. The chip is designed for business data centers and comes with faster memory and a larger memory capacity, which allows for bigger AI models to run on a single GPU.

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Analysts keep their buy rating

Three analysts updated their price targets on August 9 on TipRanks. The two analysts from Citi and Bank of America have a price target north of $500 in the next 12 months, while only one analyst holds a price target close to the current price of $425.

TipRanks analyst ratings. Source: Interactive Brokers Fundamentals Explorer

Nvidia releases its Q2 earnings report on August 23. This could be the catalyst to push the price higher. If you’re long-term bullish on AI and Nvidia, any pullback could present a good buying opportunity.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

The post Nvidia stock chart looks ‘scary’: Technical analysis sees an imminent pullback appeared first on Finbold.

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Dennis is a business and financial writer, who had spent almost his entire life independently reporting on different business ventures with major impact on the US and global economy. Dennis places a special focus on examining tech stocks, biotech stocks all while investing a great part of his early hours to researching and writing on the companies in the US markets. Dennis has 15+ years of experience in financial markets.