The End of Bullish Momentum for Nvidia’s Stock
The bullish trend surrounding semiconductor giant Nvidia (NASDAQ: NVDA) may be approaching its end, as indicated by technical indicators, particularly in terms of buying activity.
In a recent analysis by trading expert Peter DiCarlo, it was suggested that Nvidia has experienced a decrease in buying activity for the third consecutive week. This decline occurred despite the stock maintaining positive gains.
- The closing price of the stock was higher for the week, but the BX Trender, a key technical indicator tracking buying and selling pressures, showed lower highs.
- DiCarlo identified a potential target price for Nvidia at around $110, indicating a possible correction of approximately 14% from the current price.
Diminishing Buying Momentum
While there was a significant uptrend from March to early July, recent weeks have shown diminishing buying momentum according to the analysis.
“NVDA third week in a row of slowed buying. Even with the price closing higher this week, we’re still showing lower highs on the BX trender. I AM NOT short, but I still think we see a pull back to $110,” the expert said.
DiCarlo’s analysis, supported by charts, suggests that Nvidia’s long-term bullish momentum aligns with a short-term retreat to the buy zone within its broader upward trajectory.
Concerns About a Potential Nvidia Crash
In addition to DiCarlo’s analysis, other signals indicate an imminent correction in Nvidia’s stock after a profitable year of significant gains.
- Nvidia recently formed a small-range shooting star pattern on its weekly candle, a bearish signal for a potential reversal of trend.
- A similar candle pattern was observed in October 2023, leading to significant drawdowns in the stock’s price.
- Reports of Nvidia insiders selling their shares at record levels have raised concerns about a possible crash in the stock.
Insiders have sold over 3 million NVDA shares worth more than $1 billion in 2024, signaling a move to capitalize on profits before a potential downturn in equity.
Impact on the Technology Stock Market
A potential crash in Nvidia’s stock could have far-reaching implications for technology stocks, particularly those involved in artificial intelligence (AI).
- The AI sector has been a key driver of market rallies, with certain tech stocks contributing significantly to gains in the S&P 500 index.
- This concentration has prompted comparisons to the 2000 Dot-com bubble, raising concerns about a potential bubble burst in the tech sector.
Hot Take: Potential Reversal in Nvidia’s Stock
As a crypto investor, stay informed about the potential reversal in Nvidia’s stock to make informed decisions regarding your portfolio. Watch out for signs of diminishing buying momentum and insider selling, which could indicate a forthcoming correction in the stock price.
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