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Fan Yang

Nvidia (NVDA) Pulling Back Sharply; $120 is Possible Retracement Target

Nvidia $NVDA is pulling back sharply, walking back a persistent bull rally that lasted for about 3 years from mid-2015 to mid-2018. Price essentially rallied from around $20 a share to $290 a share before retreating. We should not be surprised by the currently sharp pullback after such a persistent rally in the past 3 years. In fact, We should probably look for a major correction, followed by a long period of consolidation.

NVDA Weekly Chart

(click to enlarge)

Major Retracement:
- On the weekly chart, we can see that price has been retreating very sharply. 
- This correction has broken below key support levels, the latest of which was a rising trendline and the 38.2% retracement level.
- The next target is in $140-$150 area, which involves a previously sticky price range (from May 2017 to September 2017). It also involves the 50% retracement level. Meanwhile, the weekly RSI will likely display oversold condition at that point.
- However, the overall market continue to shift towards risk-averse strategies, NVDA might continue to be pressured. 
- I think there is a chance price falls to the $112-$120 area, which involves 1) resistance from a previous consolidation period (Dec. 2016 through April 2017), and 2) the 200-week SMA, and 3) the 61.8% retracement level.
- If price does get down to this area, I plan to load up on long positions. But even even around $145, I plan to start averaging in. 

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