After a disastrous fourth quarter of 2018, Nvidia Corporation (NASDAQ: NVDA) was forced to close the year in the negative territory, well below the 2018 opening price at 194.35. In December, the stock managed to find good support near the 124.30-dollar price tag, from which it made a slight rebound. On the positive side, since that rebound, NVDA started trading sideways, which led to a break of a medium-term downside resistance line taken from the peak of the 2nd of October. This way, investors might get a chance to jump in and take advantage of the lower price and lift the stock a bit higher.
Last week, Nvidia’s share price managed to close above an important area of resistance, at 134.65, marked by the low of the 20th of November. In our view, this increases the chances for the stock to drift a bit higher. If more investors start seeing value in the company around the current price, NVDA could rise to its next potential area of resistance at 150.30, marked by the high of the 18th of December. If the buying activity doesn’t end there, the stock could go higher and test the 163.80 obstacle, which was the high of the 30th of November.
Looking at our oscillators, the RSI and the MACD, both are supporting the above-discussed idea. The RSI, even though still below 50, is now shifting away from its oversold territory and keeps on pointing higher. The MACD is still in the negative zone but has now shifted above its trigger line and points to the upside as well.
Alternatively, if the stock reverses back down and drops below the December low, which is at 124.30, this is when we will start examining the possibility for the stock to move lower. A good area of support could be seen near the 114.00 hurdle, which is the low of the 10th of May 2017. If that area fails to withhold the price from moving lower, the 102.30 support zone may come into play. This level acted as a good bouncing ground for the stock on the 9th of May 2017.
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