Nvidia stock bearish signal emerges as drop below $150 on the horizon

Nvidia (NASDAQ: NVDA) stock’s ongoing near-term bearish sentiment is likely to persist in the coming days, with technical indicators suggesting a potential drop below $150 may be on the horizon.

Notably, the stock closed the last session at $167, down 2.7% on the day, and has fallen over 6% on the weekly timeframe, though it remains up 20% year-to-date.

NVDA stock one-week chart. Source: Finbold

Now, according to analysis by pseudonymous trader SmartReversals, the August candle formed a shooting star pattern, a technical signal often associated with market tops. 

Historically, similar setups in Nvidia’s price trajectory have preceded steep declines of -22.7%, -34.9%, and -43.4% in previous cycles.

NVDA stock analysis chart. Source: SmartReversals

Adding to the bearish case, the Stochastic oscillator has turned lower with a bearish crossover, reinforcing the view that upward momentum is fading. Each of Nvidia’s past downturns began with this same shift, leading to double-digit losses.

Nvidia’s next low target 

At current levels, Nvidia continues to hold above its five-month moving average (MA), which has acted as support in past pullbacks. However, SmartReversals warned that if this level breaks, potentially in September or October, the next logical target lies near $145, around the upper edge of a key volume shelf.

It’s worth noting that while previous declines have not unfolded in a straight line, any rebound should be treated with caution, as the broader technical picture suggests further weakness.

Despite the technical warnings, Nvidia continues to dominate the artificial intelligence (AI) sector, bolstered by strong financial performance. 

In its latest quarter, the semiconductor company reported a 56% year-over-year increase in revenue to $46.7 billion, driven largely by sales in the data center sector. Management guided Q3 revenue at $54 billion, above expectations.

On the other hand, Wall Street remains largely optimistic. Most analysts still rate Nvidia as a “Buy,” with some viewing the recent pullback as a buying opportunity.

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Source: https://finbold.com/nvidia-stock-bearish-signal-emerges-as-drop-below-150-on-the-horizon/