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Technical Update - Nvidia likely cancelling top and reversal pattern, extending uptrend
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Nvidia is set to open at new all-time high. Top and reversal pattern in the making is likely to be demolished. Uptrend likely to be extended further. Today's closing price can be crucial
Nvidia is trading approx. 12% higher around 760 pre-market following Earnings release (at the time of writing this).
If opening around that level as indicated on the daily chart (horizontal blue dashed line) it is a new all-time high thus creating a bullish price gap.
If closing higher than its previous peak at 746 the top and reversal pattern formed on the daily chart is cancelled. A closing gap has then been created and higher levels are in the cards for Nvidia. A short-term move to the 1.618 projection just below 800 will then seem likely
If Nvidia is closing the gap that it is likely creating at the opening today i.e., a closing below 741 (Body gap is considered. Body is the difference between the opening and closing price on each trading day) selling pressure can be fueled further.
The weekly chart shows a Doji Evening top and reversal pattern in the making (circled). But if Nvidia is performing a new higher close today and Friday that pattern is cancelled.
A new higher close will also most likely cancel the RSI divergence on both daily and weekly chart supporting higher levels in coming weeks for Nvidia.
If, on the other hand, Nvidia is closing below 741 today Thursday that top and reversal pattern is still in play. Then the closing of the week will be crucial.
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