Key support now around $115

Nvidia’s stock is now at an important support level, with the heavy declines across the week thus far investors and traders will be monitoring closely. After falling as low as $116.73 in yesterday’s session, the stock is now trading at around $121.09 a share following a boost in sentiment from the Asian session after TSMC reported better-than-expected earnings. The primary support in focus is the level of $115.30. A break below this level could lead to a deeper sell-off towards $107-$108, confirming the recent controversy of a market rotation. However, if we look at the technical indicators and its history, the last time the RSI was at similar levels the stock bounced back (25^th June). The past is no guarantee of the future but it can be used as a guide, especially if there aren’t any moves below the support around $115. The MACD is also aligning with the MACD positioning back in June. Therefore, a move back above $129-$130 could create more technical support and allow room for consolidation in the near future. However, caution should remain as earnings are a fundamental aspect and fundamentals can have a bigger influence on stock prices than momentum and technicals.