Nvidia stock reported a mixed earnings report and as a result, has mixed price action on Thursday. Here’s the must-hold support level it needs to stay above.
Bulls looking for more clarity on the semiconductor space didn’t get much help from Nvidia (NVDA) – Get Free Report when the firm reported earnings last night after the close.
Nvidia stock has been on a tear, rising over four straight weeks. From the low October to this week’s high, shares have climbed a whopping 57%.
On Tuesday, the stock hit its highest level since August as Warren Buffett’s Berkshire Hathaway (BRK.A) – Get Free Report (BRK.B) – Get Free Report took a 60 million share stake in Taiwan Semiconductor (TSM) – Get Free Report.
However, Micron’s (MU) – Get Free Report bearish update yesterday cast a cloud over chip stocks — one that investors were hoping would be cleared up from Nvidia’s earnings report.
Instead, it reported a mixed result.
Non-GAAP earnings of 58 cents a share missed analysts’ expectations and sank 50% year over year. GAAP earnings fell even more, declining 72%. As for revenue, sales sank 16.5% vs. the same quarter a year ago but beat analysts’ expectations by $110 million.
As for fourth-quarter guidance, the midpoint of management’s outlook calls for $6 billion in sales, just a tad shy of consensus expectations at $6.14 billion.
However, there’s hope that Nvidia’s gaming division has now bottomed. Has the stock?
Trading Nvidia Stock on Earnings
Daily chart of Nvidia stock.
Chart courtesy of TrendSpider.com
It should be no surprise that the price action in Nvidia stock is mixed after the company just reported a mixed earnings report. It doesn’t help that the market is under notable selling pressure on Thursday morning.
That said, Nvidia stock is not collapsing on the results either.
Instead, let’s keep our focus on the low $150s. That’s where the weekly VWAP measure comes into play alongside the rising 10-day moving average. The latter has been active support amid the stock’s rally of more than 50% over the last few weeks.
Until that measure fails as support, traders should continue to respect it.
Should support fail, that opens the door down to the gap-fill level near $142, along with the 21-day moving average.
However, if support continues to hold, traders can look for a push back toward this week’s high near $170. Above that opens the door to the declining 200-day moving average, followed by the $191 to $195 area.
For now, investors should recognize that the bulls are in active control of Nvidia stock. However, that changes should it break below the $150 to $153 area.
