NVIDIA Stock Market In-Depth Analysis

NVIDIA closed at $130.75 on Friday, down 4.12% for the day. The largest intraday drop reached 6.3%, with the low dipping to $127.9 and the high touching $136.2. The total market capitalization is approximately $3.21 trillion. This decline continues the recent trend of a collective pullback across the semiconductor sector. Previously, NVIDIA’s cumulative gains this year were over 70%, valuations are at historical highs, and the combination of pressure from profit-taking and concerns about industry business conditions has driven this adjustment.

‌Technical Indicator Analysis‌

‌Trend and Moving Averages‌: The stock price fell below the 30-day moving average ($135.2), breaking the short-term uptrend. However, it is still trading above the 50-day moving average ($128.5), and it remains far above the 200-day moving average ($96.8), indicating that the long-term uptrend has not been reversed.

‌RSI Indicator‌: The RSI reading has dropped to 32.1, approaching the oversold range (below 30). Short-term downside momentum is nearing exhaustion, suggesting there is a need for a technical rebound.

‌MACD Indicator‌: The MACD fast line has crossed below the slow line to form a death cross, and the histogram has turned negative. This provides a clear short-term bearish signal. However, the decline has not been accompanied by sustained volume expansion, and no trend-wide “bearish” signal indicating a prolonged downtrend has appeared.

‌Trading Volume‌: Today’s trading volume is about 279 million shares, up 35% compared with the 3-month daily average. This is a volume-backed pullback. Evidence of capital outflow is apparent, but a round of share turnover has also been completed, and selling pressure is gradually being worked through.

‌Key Support and Resistance Levels‌

‌Support Levels‌:

‌First Support: $127.9‌ — today’s intraday low, which also corresponds to the 50-day moving average. If this level is held, the short-term most likely scenario is range-bound trading between $128 and $135.

‌Strong Support: $120‌ — the late-May pullback low, and a key support level for the prior uptrend. If it breaks, it could open up more room to the downside, with a further test near $110.

‌Resistance Levels‌:

‌First Resistance: $135.2‌ — the 30-day moving average. This is the most core resistance level for a short-term rebound. Only after it stabilizes above this level can a turn from selling and a bottom be confirmed.

‌Core Resistance: $142‌ — the stage high before this pullback. Only if it can break through this level with increased volume can a short-term trend reversal be confirmed.

‌Outlook for the Coming Periods‌

‌Short Term‌: With technical indicators nearing the oversold zone, there is a demand for a technical rebound. It is expected that in the short term the stock will trade in a range of $128–$135 to absorb selling pressure. Pay close attention to whether the $128 support is effective. If it breaks, it is likely to test the strong support at $120.

‌Mid to Long Term‌: At the industry level, demand for AI computing power is still maintaining high growth. NVIDIA’s market share in the GPU space remains above 80%. The next-generation B100 chips have already begun mass production, orders are full, and core competitiveness has not changed. However, risks are also clear: the current price-to-earnings ratio (TTM) is still over 62 times, and valuations are at about the 90th percentile historically. In terms of industry competition, AMD and Intel continue to ramp up AI chip efforts, and expectations for a price war are heating up. At the same time, U.S. export control policies toward China may affect chip shipment volumes, putting downward pressure on future growth. Currently, the average target price from institutions is around $158, which still implies roughly 20% upside from the current price, but divergence has become significantly greater.

‌Trading Recommendations‌

‌Stock Traders‌:

‌Aggressive Strategy‌: If the stock pulls back into the $128–$130 range, consider entering with a small position to bottom-fish and bet on a technical rebound, targeting $135, with a stop-loss set below $125.

‌Conservative Strategy‌: Wait and watch for the stock to hold above $135. After confirming a breakout above the 30-day moving average, then enter, to avoid taking on short-term selling pressure.

‌Options Traders‌: If you are betting on a rebound, you can watch for call options with a strike price of $135 and positions near expiration. If you believe the stock will continue to face pressure in the short term, you can sell put options near $128 to collect premium, betting that support will hold.

‌Risk-Control Reminder‌: NVIDIA’s current volatility is relatively high, and this sector pullback has not ended yet. Position size is recommended to be strictly controlled within 10%. Pay particular attention to how next week’s Federal Reserve rate decision could impact technology stocks.

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