Key Takeaways
Nvidia ( NVDA ) shares are in the spotlight Monday ahead of the artificial intelligence (AI) darling’s quarterly results later this week and following a report that said the company’s next-generation AI chips have encountered issues overheating in servers.
The AI chipmaker , which is due to release its results after the closing bell on Wednesday, is expected to announce that both revenue and profit grew more than 80% from a year ago, according to analysts' consensus estimates. Investors will also be watching for updates on Nvidia's Blackwell AI chip shipments, amid concerns that supply constraints could limit the upside of the company's near-term outlook.
Blackwell chips could also come under further scrutiny after The Information reported on Sunday that they have encountered overheating problems when placed in server racks designed to hold up to 72 graphics processing unit (GPUs) .
Nvidia shares were down 0.7% at $141 in late-morning trading Monday, after falling more than 3% earlier in the session. The stock price has nearly tripled since the start of 2024.
Below, we break down the technicals on Nvidia’s weekly chart to identify key price levels other investors may be watching.
Slowing Buying Momentum
After hitting their June peak , Nvidia shares traded within a symmetrical triangle before breaking out above the pattern last month.
However, since that time, the stock has gone on make new highs, but trading volumes have continued to decrease, indicating a lack of buying participation from larger market participants.
Moreover, as the stock has made higher peaks since March, the relative strength index (RSI) has formed comparatively shallower peaks to create a bearish divergence , a chart signal that points to slowing buying momentum.
Let’s take a look at three key support levels on Nvidia’s chart and use technical analysis to project a bullish price target .
Key Support Levels to Watch
A breakdown below the symmetrical triangle could see the shares initially revisit support around $97, a location on the chart where investors may look for buying opportunities near the March peak, which closely aligns with the early-August low.
Selling below this level opens the door for a retracement down to the $76 level, an area on the chart where the stock could encounter support from the mid-April pullback low.
A technical correction in the stock could bring the $48 level into play. This area, which sits about 66% below Friday’s closing price, would likely attract bargain hunters near a range of narrow consolidation that formed on the chart between July 2023 and January.
Bars Pattern Price Target to Monitor
If the AI investor favorite's shares continue to track higher, we can project a potential bullish target by using a bars pattern, a technique that analyzes prior trends to predict future price moves.
When applying the tool to Nvidia’s chart, we extract the stock’s trending move from January to June and reposition it from last month’s symmetrical triangle breakout point. This projects a bullish target of around $270, a location where investors may decide to lock in profits .
We selected this prior move because it commenced following a breakout from a consolation period, similar to how the current move higher has started and may play out if price history rhymes.
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As of the date this article was written, the author does not own any of the above securities.
