NVDA TA for 8/29/2024NVIDIA (NVDA) saw a significant drop in its stock price despite reporting strong earnings. The company posted impressive numbers with $30.04 billion in revenue, more than doubling from the previous year, and a net income of $16.6 billion. However, the stock dropped by over 5% in extended trading for a couple of key reasons:
Slower Growth Rate: Despite the strong earnings, the rate of growth has begun to slow down. The company's guidance for Q3 revenue is $32.5 billion, which, while still significant, indicates a deceleration compared to previous quarters. Investors had been accustomed to rapid growth due to AI-related demand, and the slower pace raised concerns.
High Expectations: NVIDIA has been a top-performing stock, particularly in the AI space, and expectations were exceedingly high. Even though the company exceeded its own guidance, the market was likely hoping for even more, given the stock's substantial run-up over the past year.
Technical Analysis for NVDA Trading Tomorrow
Support Levels: The immediate support level lies around $116.92, with a further significant support level at $115.01. If these levels hold, they could serve as good entry points for a long position.
Resistance Levels: Resistance is seen around $123.12 and $123.95, which correspond to previous price consolidation zones. Breaking above these levels could indicate a reversal and a potential bullish trend.
Price Action: Given the sharp decline, the price may test the $115-$116 support zone. If it holds, a bounce back toward $123 could occur. However, if it breaks below $115, further downside to around $110 or even lower could be seen.
Entry/Exit:
Long Entry: Consider entering around $116 with a stop loss just below $115, targeting an exit near $123.
Short Entry: If the price breaks below $115, consider shorting with a target near $110, setting a stop loss around $118.
Directional Prediction
Given the current sentiment and technical setup, there's a likelihood of further downside if the broader market also remains weak. However, a bounce is possible if buyers step in at the support levels mentioned. Watch for volume and price action near the support zones to gauge the market's direction.
