Nvidia's $500 Question: Which Way Is Risk Pointed?

Nvidia (NVDA) is one the most closely watched stocks in the marketplace. NVDA declined Tuesday as Edgewater Research sees "mixed" data points for artificial intelligence and graphics processor demand. Prices have retreated for the third time in four months. Is the third time the charm? 

Let's check the charts and indicators.

In this daily bar chart of NVDA, below, I can see that prices have moved sideways since July. NVDA is trading above the rising 50-day moving average line and the rising 200-day moving average line. The On-Balance-Volume (OBV) line shows a slight rise the past few months even though the trading volume has been neutral. The Moving Average Convergence Divergence (MACD) oscillator has moved sideways around the zero line in recent months. 

In this weekly Japanese candlestick chart of NVDA, below, I see a mixed picture. Prices have rallied since the fourth quarter of 2022. NVDA trades above the rising 40-week moving average line. The weekly OBV line has been neutral/stalled the past five months. The MACD oscillator has been correcting since August but it has narrowed dramatically and it could easily cross to the upside if NVDA rallied.

In this daily Point and Figure chart of NVDA, below, I can see a potential upside price target in the $591 area but a trade at $510 is needed to refresh the uptrend. 

In this weekly Point and Figure chart of NVDA, below, I can see a potential upside target in the $726 area. Maybe.  

Bottom line strategy: Can NVDA breakout over $500? Maybe, but it has stalled there a number of times. With the averages stretched to the upside, the risk, in my mind, is to the downside. I have no idea what might turn the price of NVDA lower but that is the risk I see at this point in time. 

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