We told readers of Real Money on January 14 that the shares of Nvidia ( NVDA) could fall further as we wrote that "Some traders and analysts love to buy a pullback. I, on the other hand, like to see clues that a low or bottom has been made. I would avoid the long side of NVDA until the technical clues point to a bottom reversal."
The Point and Figure charts gave targets at that time of $233 and $205, so we need to check on conditions again with prices touching $215 Monday.
In this updated daily bar chart of NVDA, below, we can see that prices are testing the rising 200-day moving average line. The slope of the 50-day line is negative (bearish). The On-Balance-Volume (OBV) line has made a new low for the move down from November telling us that sellers of NVDA are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator started 2022 by moving to a sell signal as it fell below the zero line.
In this weekly Japanese candlestick chart of NVDA, below, we can see weakness. Prices are below the rising 40-week moving average line. The weekly OBV line turned lower in November and the MACD oscillator crossed to the downside earlier this month.
In this updated daily Point and Figure chart of NVDA, below, we can see that the software is now projecting the $140 area as a potential price target.
In this weekly Point and Figure chart of NVDA, below, we see a bearish target of $113.
Bottom line strategy: Continue to avoid the long side of NVDA. The decline in this stock is not over. Do not try to catch a falling knife.
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