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NVIDIA Corporation (NVDA) Shows Strong Bullish Momentum with New Graphics Chips Announcement

StockInvest.us, 1 month ago

NVIDIA Technical Analysis

NVIDIA Corporation (NVDA) has shown significant bullishness in the recent trading session, closing at its year high of $522.75, with the last close at $522.53. The substantial jump, a 6.43% increase from the previous close, signifies strong investor confidence, particularly in reaction to the new graphics chips announcement. The price momentum is reflected in the Relative Strength Index (RSI14) at 65, which is on the higher end but still below the overbought threshold of 70, suggesting there might still be room for upward movement without immediate concern for a pullback based on RSI alone.

The moving averages present a bullish trend, with NVDA trading well above its 50-day moving average ($471.39) and 200-day moving average ($410.45). The Moving Average Convergence Divergence (MACD) further supports this trend with a value of 8.337, indicating sustained upward price momentum over the past three months.

The Average True Range (ATR) stands at 2.628, which provides insights into the current volatility levels, suggesting moderate price fluctuations can be expected. With no immediate resistance level in sight due to the stock reaching a new high, the focus will be on the support level at $495.22 and the stop-loss of $494.30, which creates a cushion in case of a price reversal.

Fundamental Analysis

Fundamentally, NVIDIA’s sky-high market capitalization of $1.29 trillion attests to its significant presence in the industry. The stock's price-earnings (PE) ratio is relatively high at 69.12, which can be perceived as overvalued when compared to industry averages. However, high PE ratios can also indicate investors' expectations of high future growth, which seems plausible given NVIDIA's leading role in burgeoning sectors such as machine learning and graphics processing.

NVIDIA The earnings per share (EPS) at 7.56 denote the company's profitability and appear to be a strong foundation for the stock price given the excitement around its latest product announcements. Given the earnings announcement is scheduled for 02/21/2024, the recent product launches may significantly impact future earnings results.

With a high volume of 62.89 million, notably above the average volume of 42.02 million, investor interest in NVDA is evident and can contribute to the stock's liquidity and price discovery process. The trading consensus has a “Buy” recommendation from analysts, with 35 encouraging buying and only one recommending a ‘sell’.

Moreover, recent news about Wall Street raising profit estimates for 2024 for NVIDIA implies faith in the company’s growth trajectory, potentially attracting more investors. Additionally, being positioned as a leader in the machine-learning sphere could provide substantial long-term growth, albeit with caution as the sector is still subject to rapid change and competition.

Stock Performance Predictions

For the next trading day, January 09, 2024, NVIDIA may continue to experience bullish sentiment, possibly leading to further gains, unless the market witnesses profit-taking behavior due to the recent leap in stock prices. For the upcoming week, the stock may see heightened volatility as more investors react to the latest updates and analysts' adjustments to profit estimates, with the possibility of positive engagement if the technology sector maintains its momentum.

Overall Evaluation

Based on the technical indicators and fundamental data, the evaluation of NVIDIA Corporation's stock is a “Buy.” The current momentum, coupled with the company’s promising position in high-growth technology sectors, suggests that the stock will likely continue to appreciate in the short term barring any unforeseen market-wide downturns or negative company-specific events. Investors should monitor daily price movements and watch for any signs of price stabilization or reversal but could consider taking advantage of the current positive trend that NVDA is exhibiting.

Check full NVIDIA forecast and analysis here.