Key Takeaways
- Nvidia shares will remain in the spotlight Thursday after CEO Jensen Huang said late yesterday during an interview on CNBC that demand for the company’s next generation Blackwell AI chips is “insane.”
- The stock has oscillated within a symmetrical triangle, a chart pattern that indicates a period of consolidation, typically followed by a new trending move in the direction of a breakout and longer-term trend, which in Nvidia’s case, signals further bullish price momentum.
- The measuring principle and bars pattern technique forecasts upside targets on Nvidia’s chart at $180 and $210, respectively.
- A breakdown below the symmetrical triangle would likely see the shares find support around $97, near a trendline linking the twin March peaks with the upward sloping 200-day moving average.
Nvidia (NVDA) shares will remain in the spotlight Thursday after CEO Jensen Huang said during a CNBC interview late yesterday that demand for the company’s next generation Blackwell artificial intelligence (AI) chips is “insane.” The AI darling also announced an expanded partnership with IT consulting firm Accenture (ACN).
The chipmaker’s stock, which has gained 140% so far this year and helped fuel a broader rally in the S&P 500, continues to surpass Wall Street’s lofty expectations amid insatiable demand for its silicon as companies and governments invest heavily in AI infrastructure to power the technology.
The stock was up 1.4% at $120.50 in premarket trading Thursday about two hours before the opening bell.
Below, we take a closer look at the technicals on Nvidia’s chart and identify important price levels to focus on.
Chart Indicates Further Bullish Momentum
After topping out in late June, Nvidia shares have oscillated within a symmetrical triangle, a chart pattern that indicates a period of consolidation, typically followed by a new trending move in the direction of a breakout and longer-term trend, which in Nvidia’s case, signals further bullish price momentum.
Indeed, If the stock moves above the triangle, with above-average trading volume confirming the breakout, investors can determine two potential upside price targets using the measuring principle and a bars pattern.
Upside Price Targets
To forecast a price target using the measuring principle, we calculate the distance between the symmetrical triangle near its widest point and add that amount to the pattern’s top trendline. For example, we add $55 to $125, which projects an upside target in the shares of $180.
We can also use a bars pattern, which analyzes a prior trending move to predict a future directional move, assuming price patterns tend to rhyme. To use the technique on Nvidia’s chart, we extract the stock’s trend higher from January to March and reposition it from this week’s low. Doing so forecasts an upside target of about $210, around 77% above Wednesday’s closing price.
We selected this prior move as it followed an earlier symmetrical triangle, offering investors insight how a trend higher from the current pattern may potentially play out.
Key Breakdown Area to Monitor
Despite the bullish technicals on Nvidia’s chart it’s also worth keeping a key breakdown area in mind given the stock’s history of significant price fluctuations.
That level sits around $97, a region likely to attract support near a trendline linking the twin March peaks with the upward sloping 200-day moving average.
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As of the date this article was written, the author does not own any of the above securities.