Nvidia stock has been trading incredibly well on the long side. Here’s where to buy the dip next.
Shares of Nvidia (NVDA) – Get Free Report have been on fire.
The stock of the graphics-chip specialist has rallied in five straight weeks and has climbed more than 56% in that stretch. From the 2022 low in October, Nvidia stock has more than doubled.
For the bulls, it’s been impressive. What’s more, Nvidia hasn’t yet reported earnings.
Wall Street shrugged off the horrendous report from Intel (INTC) – Get Free Report and applauded the results from Advanced Micro Devices (AMD) – Get Free Report.
Combined with the broad-based rally in tech, Nvidia stock has been a robust performer.
In fact, of all US stocks with a $500 billion market cap or higher, Nvidia has easily been one of the best performers over the past month, up 50%.
Meta Platforms (META) – Get Free Report comes close, with a 49% gain over the past month, while Tesla (TSLA) – Get Free Report dominates the list with its 77% gain.
That’s why the bulls are looking to buy a dip in Nvidia stock.
Buying the Dip in Nvidia Stock
Daily chart of Nvidia stock.
Chart courtesy of TrendSpider.com
Nvidia stock rallied hard off the October low, then paused in the $185 to $190 zone, which had been resistance for months. After a significant pullback, the shares reenergized and pushed through this level.
That sent Nvidia up to the 61.8% retracement of the current range. Now it’s trying to consolidate above the $208 level — which was significant support in first-quarter 2022 — and the bulls are looking to maintain control.
With all of that bullish action, some sort of pullback and consolidation would be healthy, to allow the stock to digest the recent surge.
A bullish move for Nvidia stock would be a pullback to the 10-day moving average and the $200 level plus development of support there.
An even better risk/reward opportunity would come on a pullback to the 21-day moving average if it aligns with a retest of the $185 to $190 zone. That area was such significant resistance that a retest of this zone could be quite compelling for buyers.
If it lines up with a test of a notable moving average — like the 21-day — then it gives one catalyst for the buyers.
Plus, a break of $185 and the 21-day is a clear-cut sign for short-term traders to cut their losses and wait for a better setup on the long side. Specifically, that could put the $170 level and 50-day moving average in play.
On the upside, a push through $220 opens the door to the gap-fill near $230.60.
Here’s the bottom line: A hold of the 10-day shows that bulls are in sole control. However, the better risk/reward trade would be a larger pullback. Let’s see how Nvidia stock holds up this week.
