When the company reported earnings after the close, the stock fell flat, dropping more than 6% in after-hours trading. That's even after the graphics-chip specialist beat earnings estimates.
But that’s not the case on May 26. The shares opened 5.5% lower and then moved into positive territory, up more than 5% on the day.
The Santa Clara, Calif., company delivered a top- and bottom-line beat — including record revenue — but a muted outlook had weighed on the stock price.
So why the rebound? Wall Street impatiently reacted to the headline numbers, failing to account for why guidance was great but a bit short of expectations.
It’s due to the war in Eastern Europe and the covid lockdowns in China. Without those factors, the company easily clears expectations.
Investors also seemingly failed to account for the fact that Nvidia stock was down more than 50%. That should have investors thinking about buying the recent quarter, not selling it.
Trading Nvidia Stock
As you can see on the weekly chart above, Nvidia stock continues to find support in the mid- to high-$150s. After opening near $160 today, it has been rallying.
Next up is last week’s high, at $183.71. If Nvidia can clear this level, it opens the door up to the vital $195 area. There the stock will find the 21-month and 10-week moving averages. It will also find the 50% retracement as measured from the all-time high down to the March 2020 covid low.
Just like the $155 area, the $195 area will be key for Nvidia stock.
If it cannot push through $200, we must keep an eye on where support comes into play. Ideally, we will see a higher low form, giving bulls some momentum on their side and some structure to work with.
If that’s not the case, we’ll need to see how Nvidia stock handles the $155 to $160 region and if it can again act as support.
On the upside, a push through $195 opens the door to $200-plus. Specifically, it will put the $208 to $212 zone on the table, which was a notable support/resistance zone over the past several quarters.
Should Nvidia stock push through it, we could see a rally up to the $225 to $235 area where it finds the 21-week and 50-week moving averages.