Nvidia Rallies to Its 200-day Moving Average Line: Now What?

Something in the chip stock's charts gives me pause.

Shares of Nvidia (NVDA) are testing its 200-day moving average line. Let's check out the charts and the indicators to see if the shares will fail at this chart point or push above it.

In the daily bar chart of NVDA, below, we can see that the shares have made a recovery from a low in early October. Prices closed above the 50-day moving average line by the end of October and the slope of this shorter average turned positive in early November. NVDA is testing the declining 200-day line and the jury is out on whether prices continue to rise.

Trading volume has declined from early November into December and that is not what bullish traders want to see -- they would rather see volume increase. The daily On-Balance-Volume (OBV) line has stalled since the middle of November. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside but Friday's price strength may move the oscillator higher.

 

In the weekly Japanese candlestick chart of NVDA, below, we see an improving technical picture. Prices have rallied to the 40-week moving average line.

 

The weekly OBV line shows improvement from early October. The MACD oscillator has crossed to a cover shorts buy signal.

 

 

In this daily Point and Figure chart of NVDA, below, we can see an upside price target in the $184 area.

 

 

In this weekly Point and Figure chart of NVDA, below, we can see a price target in the $288 area.

 

 

Bottom-line strategy: Real Money subscribers often ask me for the odds of something happening. What are the odds that NVDA breaks above the 200-day moving average line and keeps going? Honestly I don't know but the shrinking volume picture on the daily bar chart gives me pause.

 

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