NVIDIA Corporation (NASDAQ: NVDA) has been in the news lately, as demand for its products is increasing rapidly. The US is starting to sound the alarm, as there are supply shortages for semiconductors, which are heavily used in industries, such as mobile computing and automotive. NVIDIA designs graphics processing units, which are in high demand, especially by the gaming industry, due to the latest global lockdowns. The company also reports its earnings tonight, after the US closing bell, and the expectations are for a strong EPS reading, going from $1.54 to $2.20. NVDA could fall under increased volatility in the upcoming days, as investors will be keeping a close eye on that stock.
The technical picture of NVDA on our daily chart shows that, after hitting the all-time high, at 614.80, in the beginning of February, the share price started correcting lower. Although we could see more downside in the short run, as long as the stock remains above a medium-term upside support line drawn from the low of September 4th, we will continue aiming higher overall.
A further slide could bring the price to the 533.55 hurdle, marked by the low of February 4th, or to the aforementioned upside line. If that area is able to provide support, new buyers might join in and NVDA could rebound. The stock may travel back to the 559.95 obstacle, or even to the 583.10 zone, which is the inside swing low of February 18th. If the buying doesn’t stop there, the next possible target could be at 614.80, which the current all-time high.
The RSI is currently pointing lower, but remains fractionally above 50. The MACD is also pointing lower, while running below its trigger line. However, the MACD continues to sit well above zero. Although we are seeing the oscillators declining, they still show positive price momentum, which is somewhat inline with the above-discussed scenario.
Alternatively, if the stock ends up breaking the aforementioned upside line and falls below the 511.70 area, marked by the low of January 27th, that could open the way to some further declines, as some new buyers might get spooked. The share price may slide to the 492.00 territory marked by the lowest point of March, where it could receive a temporary hold-up. If NVDA is still not able to attract new buyers then, it might fall to the 476.24 hurdle, or to the 468.40 level, marked by the lowest point of September.
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