However, shares have put in a solid rally lately as the stock works on its fourth straight daily gain and its sixth rally in the last seven sessions. And its one down day during that stretch? A declined of 69 basis points.
That’s despite the giant semiconductor shortage we’ve seen in video games, automobiles and other industries.
Almost a month ago, I discussed Nvidia looking like it had bottomed. It soon ran into the resistance we were looking at and has since powered higher. Let’s get a fresh look at this stock as the charts have been setting up nicely.
Above is a weekly chart of Nvidia, highlighting its strong bounce off the 50-week moving average. While it looked like Nvidia was breaking down below the 200-day, this moving average was here to lend a bounce.
Shares initially struggled with the flatlining 10-week and 21-week moving averages, but the stock powered through these measures during last week’s holiday-shortened trading stretch.
Not only are we pushing higher off last week’s gains, but Nvidia stock is now giving bulls a monthly-up rotation by clearing the March high at $557.
After such a quick bounce, Nvidia stock is susceptible to a pullback. In that event, let’s see if the 10-week and 21-week moving averages - which were resistance last month - act as support.
If so, the bullish move remains intact.
The longer Nvidia stock can hold up over $557, the better it looks. Specifically, it opens the door to $589, which is the September high and has been resistance for several quarters now.
The one exception to that observation was February, when shares pushed through resistance and ran to $614.90.
With the monthly-up rotation in play, investors’ attention is shifting to $589. If the stock clears that mark, $615 will be next. For now, keep an eye on the $550 to $557 area.