Nvidia shares are poised to close below a critical technical threshold for the first time since May, reflecting a continued shift in investor sentiment away from the prominent artificial intelligence chip manufacturer. The stock experienced a significant drop, declining as much as 4 per cent to $US167.22 on Tuesday. This marks the fourth consecutive day of losses for Nvidia, pushing it below its 50-day moving average of $US171.02, a closely monitored indicator of short-term momentum. Nvidia is a leading designer of graphics processing units (GPUs) that enhance experiences on computing platforms. The company’s products are used in gaming, professional visualization, data centres, and automotive markets.
The breach of the 50-day moving average is generally viewed by market analysts as a bearish signal, suggesting a potential weakening of near-term positive momentum. Buff Dormeier, chief technical analyst at Kingsview Partners, expressed concern about the stock’s short-term prospects following this development. According to Dormeier, the break below the 50-day moving average indicates a breakdown in momentum, warranting caution regarding the stock’s performance.
Dormeier identifies $US160 as the immediate support level for Nvidia shares, with $US145 serving as the subsequent level. He notes that $US145 preceded a significant breakout in June, making it a crucial level to watch. A drop below $US145, according to Dormeier, would raise substantial concerns about Nvidia’s outlook. Investors will be closely monitoring Nvidia’s performance in the coming sessions to gauge whether it can regain its footing above the key technical level.
