We watch Nvidia Corp. (NVDA) a lot and covered the price action a number of times in July, like this review back on July 10. We did not have a strong conviction about the stock and concluded, "The price action tomorrow and Wednesday could be pivotal. Strong sessions and high closes would probably mean the bull was back but weak closes could mean a test of the 50-day average line is not far off."
Prices pushed a little higher and then pulled back slightly. Today I am finding some further bearish divergences, which suggest the path of least resistance may turn out to be lower. A review of the daily and weekly charts should show what I am watching closely.
In this daily bar chart of NVDA, above, we can see that the pace of volume was slower in July than June even though prices made a higher high. Like other technical analysts I like to see volume increase with the trend. The daily On-Balance-Volume (OBV) line did not made a new high in July when prices made new highs -- bearish divergence. Another divergence shows up in the momentum study where the readings (bottom panel) slow from May to July.
NVDA is still going up but the pace of the advance has slowed.
In this three-year weekly bar chart of NVDA, above, we really don't have any bearish signals but we can see a parabolic rise the past two years. After seeing this kind of rally many times in the 1970s I learned that late entrees are very risky.
Bottom line: It would be nice to believe that this time is different but my old brain cells remember that parabolic advances tend to not end well.