Option call bets cooling down, NVIDIA's decline not stopping?
NVIDIA's stock price sharply pulled back, leading to a reversal in stock and options trading volumes, with a decrease in options trading activity. Trading activities indicate a lack of confidence. Despite NVIDIA's stock price soaring for a period of time, cash trading is declining. The stock price has fallen for three consecutive days, with a market value evaporating by $430 billion, and technical analysis suggests a possible bottoming out. Despite the pullback in stock price, it has still risen by nearly 140% year to date. The fluctuation of NVIDIA's stock price has attracted market attention
Kingsview Partners Chief Technical Analyst Buff Dormeier said that this sudden pullback includes some signs of surrender. He referred to the 1:10 stock split announcement made last month, saying, "After all this good news - the split, becoming the largest company - this situation is worrying." "Dormeier expects the short-term support level to be around $115, with the next important support level at $100.
The $115 area of NVIDIA's stock price is close to the key "Fibonacci retracement level," which is a tool used by technical analysts to determine support or resistance levels for stocks and other assets. The stock has retraced about 38.2% from its intraday low in April to last week's record high, which is approximately 2% lower than Monday's closing price.
Oppenheimer's Chief Technical Analyst, Ari Wald, believes that for NVIDIA, the long-term trend is more important than any specific level, and the long-term trend remains strong, with the stock well above the 50-day moving average of around $101 and the 100-day moving average of around $92.
In an interview, he said, "Typically, topping is a process, with several rounds of buying and selling, and then the price gradually shows weakness, failing to hold key levels. We haven't seen that yet. That's how NVIDIA trades."
While Wald, like Dormeier, believes that NVIDIA's long-term uptrend will not change, he is still keeping an eye on the key level of $100.
Bruce Zaro, Chief Technical Strategist at Granite Wealth Management, stated: "For stocks like NVIDIA that are in an uptrend, breaking the first support level is not a cause for concern." However, he mentioned that if the price falls below $100, it would be very bad.
Zaro explained, "This may not have a long-term impact, but it will indicate that you should remain patient, especially as we wait for the elections and the Fed weighs interest rates, the market may experience volatility and a downward bias."