Technical Update - Nvidia hit by heavy selling. Can it bounce back? Technical Update - Nvidia hit by heavy selling. Can it bounce back? Technical Update - Nvidia hit by heavy selling. Can it bounce back?

Technical Update - Nvidia hit by heavy selling. Can it bounce back?

Equity 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Nvidia (NVDA) gapped lower yesterday and formed a Hammer like candle (ideally a Hammer has no or a little upper shadow).  IT could be the exhaustion of a sell-off initiated when Nvidia close below 164.78 support.
The Hammer candle indicates a rebound and bottom fishers are likely to try to buy the dip. If the gap is closed i.e., a close above 150.94 is needed next resistance is at 164.78.
However, if buyers fail to close the gap from yesterday, which is quite likely, selling pressure is likely to return meaning a bounce is likely to be short lived.
Daily RSI is below 40 i.e. negative sentiment indicating lower levels are likely (after a possible minor bounce).

Weekly chart shows Nvidia is in a down trend with a consolidation area between 144.50 and 123.00. A spike down to the lower level at 123.00 and the 200 SMA is likely. 
Source: Saxo Group
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