NVDA 8/191. Market Structure Analysis
Trend Analysis
Short-Term Trend: NVDA has been in an uptrend, as seen in the ascending channel on the 1-hour chart. The price has been making higher highs and higher lows, which indicates a bullish market structure.
Medium-Term Trend: The broader trend since the beginning of August also supports the uptrend. NVDA has recovered from lows around $96.87, establishing a series of higher lows.
Key Levels
Resistance Levels:
$125.00: Current near-term resistance.
$136.14: Medium-term resistance, likely to be tested if momentum continues.
$140.78: A significant level, representing a possible target if the uptrend strengthens.
Support Levels:
$124.23: Immediate support if NVDA pulls back.
$114.33: A key support within the ascending channel.
$96.87: Stronger support, representing a low from earlier in the month.
2. Last Week's Market Data and Influence
Market Sentiment
Broader Market Influence: Last week, major indices like the S&P 500 and NASDAQ saw mixed performance with some volatility due to economic data releases and earnings reports. NVDA, being a tech-heavy stock, is influenced by the overall tech sector's performance. A positive sentiment in the tech sector, driven by strong earnings and AI-related news, could have contributed to NVDA's continued strength.
Sector Strength: The semiconductor sector, including NVDA, has shown resilience despite some broader market uncertainties. The AI boom and NVDA’s strong position in this space have been key drivers.
Volume Analysis
Volume Trends: If volume was increasing alongside the price last week, it would suggest strong buying interest, indicating that the uptrend might continue. On the contrary, if volume was decreasing, it might signal that the rally is losing momentum, which could lead to a pullback.
3. Possible Direction for Monday
Bullish Scenario
Breakout Above $125.00: If NVDA breaks above the $125.00 resistance early on Monday with strong volume, the next target could be around $136.14. This move would confirm the continuation of the current uptrend.
Support Hold: If NVDA pulls back but holds above $124.23 or within the ascending channel, it might provide a good buying opportunity for a push higher.
Bearish Scenario
Rejection at $125.00: If NVDA fails to break above $125.00 and shows signs of exhaustion, it could retrace towards $114.33, especially if broader market conditions are weak.
Break Below Channel: A break below the ascending channel's lower trendline (around $114.33) with increased selling pressure could signal a deeper correction, potentially targeting the $96.87 support level.
4. Catalysts to Watch
Earnings Reports & Economic Data: Pay attention to any semiconductor-related news or earnings, as well as key economic data that could influence overall market sentiment.
Broader Market Movement: Monitor the NASDAQ and other tech-heavy indices for signs of strength or weakness, as this will likely affect NVDA's performance.
5. Conclusion
Bullish Bias: Given the current trend and market structure, NVDA appears poised for further gains if it can break above the $125.00 resistance. However, caution is warranted near resistance levels, and any pullbacks should be closely watched for potential buying opportunities at key support levels.
Key Indicators: On Monday, focus on early price action around $125.00 and monitor volume. A strong break could lead to a rally, while failure might lead to a retracement.
