Nvidia (NVDA) shares have captured the market's attention in recent weeks with a blowout earnings report and its apparent command of the AI market and the future of everything. The market is a discounting mechanism and perhaps the latest chart action and indicator readings suggest a change in direction.
Let's check the charts of Nvidia to hear what they have to say.
In this daily Japanese candlestick chart of NVDA, below, I can see some problems for the bulls. The candles in the past few sessions show a top reversal pattern in this time frame. I see a bullish white candle followed by two back-to-back doji patterns indicating a pause or balance. A doji has the same or nearly the same open and close. This means the bulls and bears are in balance. The balance is upset with a red or bearish candle this past Friday. Prices remain above the rising 50-day moving average line and above the rising 200-day line. The trading volume has decreased since the first test of the $500 level despite the increased coverage of the stock in the media and recent jump in price targets by the sell side.
The On-Balance-Volume (OBV) line has equaled its June high but it has not made a new high like prices have. The 12-day price momentum study shows weaker momentum from June to August even though prices made higher highs. This is a bearish divergence and can foreshadow weaker prices ahead.