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NVIDIA's Technical Analysis Shows Bearish Trend, Potential Upside Ahead

StockInvest.us, 2 months ago

NVIDIA Technical Analysis

Looking at the given data, NVIDIA reported its last close on September 20, 2023, at $422.39, which was a drop of $12.81 or 2.94%. The trading range for this particular day was between $422.23 (low) and $439.03 (high). The company has demonstrated considerable volatility over the past year, with a low of $108.13 and a high of $502.66.

NVIDIA's Relative Strength Index (RSI) is currently at a level of 10, significantly below the standard neutral benchmark of 50. This could suggest that the stock is oversold. However, the Moving Average Convergence Divergence (MACD) is at 9.40, indicating positive momentum. The price of the stock lies well below both the 50-day moving average of $453.99 and the 200-day moving average of $313.72, suggesting a bearish trend.

The Average True Range (ATR) for the stock, which measures volatility, is currently at 3.93. This suggests that the concerns over fluctuating prices should be moderate. Furthermore, the volume of traded shares was 46.43 million, slightly below the average volume of 49.56 million.

Fundamental Analysis

NVIDIA has a massive market capitalization of $1.03 trillion, making it one of the largest companies on the NASDAQ exchange. The EPS for the company is currently at $1.93, which, when considered with the high share price, results in a rather high PE ratio of 215.6.

Despite the high PE ratio, NVIDIA has a significant amount of shares outstanding at 2.47 billion. The Discounted Cash Flow (DCF) is $417.45, slightly under the last close price, suggesting a potential overpricing of the shares.

NVIDIA However, interestingly, expert consensus puts a median target for the stock at $265 and a high target at $800. This could mean there is unrealized potential value in NVIDIA's stock. Moreover, the majority of analysts currently lean towards buying NVDA, with 36 recommending a "buy," 2 advising to "hold," and just 1 suggesting to sell.

News Analysis

Recent news indicates that NVIDIA's Data Center business saw a surge in growth. Even though some analysts believe some AI-related stocks should be sold, NVIDIA's data center performance and money-making potential within the growing artificial intelligence (AI) and GPU market may provide an argument for holding onto the company's shares. The question on whether NVIDIA's stock has hit a temporary dip since the last earnings report or if it's part of a longer-term trend is something to consider.

Upcoming Trade Predictions

Given these factors, NVIDIA might see a slight increase in stock price on the next trading day due to oversold conditions (based on RSI). Looking at the broader frame for the upcoming week, investors should be wary of continued fluctuations due to the current bearish trend denoted by the stock trading below both moving averages. However, they may anticipate some potential upside, as suggested by the positive MACD and targets given by analysts.


In summary, NVIDIA Corporation at the moment can be considered a 'Hold.' The strong growth in its Data Center business, the significant unrealized value apparent in expert consensus targets, and the positive underlying market trend in AI and GPU markets paint a strong picture for NVIDIA's future prospects. However, the current technical indicators point towards a bearish trend and slightly overpriced shares, which calls for caution for potential buyers. As always, this analysis should be supplemented by further research and consideration of broader market trends.

Check full NVIDIA forecast and analysis here.