Skip to main content

Have Nvidia Shares Finally Hit Bottom?

Nvidia has been hammered from its highs, down about 25% at the recent low. Is that the bottom?

Nvidia  (NVDA) - Get NVIDIA Corporation Report has been a bit of an anomaly. It hasn’t participated in the rally that growth stocks have seen for the last several quarters, but it’s not exactly considered a FAANG holding.

While lacking the hyper growth that some of its smaller peers boast, Nvidia has pretty respectable growth among the investment community.

In essence, it sits somewhere between FAANG and high-growth stocks. Yet, it seems to be punished on both fronts. 

Nvidia has stagnated like FAANG stocks have over the past few quarters, as Apple  (AAPL) - Get Apple Inc. Report, Amazon  (AMZN) - Get, Inc. Report and others continue to consolidate in a sideways manner.

Now it’s selling off with high-growth stocks. At its recent low, Nvidia stock was down almost 25%.

It’s worth mentioning that those losses outpaced Advanced Micro Devices  (AMD) - Get Advanced Micro Devices, Inc. Report as well, which dipped 21.6% at its low.

With shares bouncing now, has Nvidia bottomed?

Nvidia, Apple, Amazon and AMD are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells NVDA, AAPL, AMZN or AMD? Learn more now.

Trading Nvidia

Daily chart of Nvidia stock.

Daily chart of Nvidia stock.

Scroll to Continue

TheStreet Recommends

Late last week, Nvidia looked like it was ready to break down, as shares were trading below the September low and the 200-day moving average. Then the stock posted a strong bounce before the close. 

This is a great lesson on applying multiple timeframes to one’s analysis.

On Monday, shares closed at the lows and aggressively below the 200-day moving average. For what it’s worth, this was also below the preceding session’s low (Friday March 5), as well as the September low.

By the looks of the daily chart, this stock was toast.

But look at that 50-week moving average sitting down there. Not that there’s anything particularly special about this moving average in particular, but it was a signal that Nvidia may not be ready to roll over quite yet.

It may not have been enough to inspire bulls to buy, but perhaps it was enough to keep them from selling.

Nvidia has since ricocheted higher, as it now tries to close above its 10-day moving average.

I want to say Nvidia stock has bottomed at this point. Perhaps growth stocks have one more leg down, but even if that’s the case, I’d like to see this name avoid another new low.

If it can stay above $500 and the 200-day moving average, look to see how it handles its 50-day and 100-day moving averages near $540.

The action might remain choppy, but Nvidia is a great company with strong fundamentals. Let’s see if the current lows hold.