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NVDA's Technical Analysis Suggests Oversold Condition, Stock Predicted to Bounce Back

StockInvest.us, 2 months ago

NVIDIA Technical Analysis

Looking at NVIDIA Corporation's (NVDA) technical indicators strength, the stock appears to be in an oversold condition as suggested by its RSI14 of 17. The general rule of thumb states that an RSI value below 30 suggests an oversold condition which could potentially be a bearish sign. NVDA’s last close was $435.20, and it experienced a decrease of $4.46 (-1.01%) from the previous trading session. Currently, the support resides at $432.99, slightly below the last close price. Should it break this level, the next support will be at the suggested stop-loss level of $406.69.

The Moving Average Convergence Divergence (MACD) over a 3-month period is 12.34, indicating a bullish trend. However, the 50-day moving average, at $454.33, is higher than the last closing price of $435.20, which could potentially indicate a recent downward trend in the short run. Yet, the 200-day moving average stands at $309.93, significantly below the current price indicating a bullish trend in the long run.

The Average True Range (ATR) stands at 3.82, symbolizing a moderately high level of volatility.

Fundamental Analysis

With a market capitalization of $1.07 trillion, NVDA is one of the highest valued technology companies in the NASDAQ stock exchange, with a volume of 36.45 million and an average volume of 49.92 million. The company's shares outstanding are 2.47 billion.

NVDA's Earnings per Share (EPS) stands at $1.93, and its high Price-to-Earnings (PE) ratio of 225.49 suggests that investors are willing to pay a premium for its earnings growth potential. The next earnings announcement will be on November 15, 2023.

The Discounted Cash Flow (DCF) value of NVDA is approximately $436.55, which is only slightly higher than the last close price, suggesting that the stock may be fairly valued at the moment.

NVIDIA The analysts' consensus for NVDA is a "Buy". The target consensus estimates the stock to reach $345.89 with a high target of $800 and a low target of $133.

News Analysis

In terms of recent news, competition seems to be mounting for NVDA from both new startups and established industry players. Specifically, SambaNova Systems, a startup, has launched a new AI chip designed to be more efficient and cost-effective than current industry offerings. Moreover, Pat Gelsinger, Intel's CEO, stated that Intel sees itself as a strong competitor with NVDA in the AI chip market.

Stock Prediction

From a technical perspective, combining the oversold RSI14 and the MACD, It is anticipated that NVDA may bounce back in the short term. Based on the fundamental analysis, considering the perceived value of NVDA shares as indicated by the DCF and the analyst "Buy" consensus, the stock is set to grow.

For the next trading day, September 20, 2023, a mild positive correction might occur by pulling the price from the oversold condition. Implementing the ATR, NVDA may trade within a range of approximately $431.38-$439.02.

Taking the expected price growth into account, the stock is predicted to trend higher during the following week.

In conclusion, NVDA is rated as a Buy, given the combination of its technical analysis status and positive growth prospect from a fundamental perspective.

Check full NVIDIA forecast and analysis here.