As Nvidia Corporation NVDA shares closed above the $140 level for the first time in 20 days on Tuesday, traders expect the stock to make new highs if it breaches $145 per share.
What Happened: Traders are bullish on Nvidia as its share price exceeded the 50-day simple moving average and moves above $140 apiece for the first time since Dec. 6, on Tuesday’s shortened trading session. According to a quant trader, Peter DiCarlo, the share price could reach $170 apiece in the first quarter if the stock moves beyond $145 per share.
However, he adds “If we reject and this is a trap, price will sell off to $120. That will then be the confirmed bottom before the next move up to $170 in Q2.”
According to a chart shared by the founder of The Rock Trading Group, the share price needs to breach the $141.87 price level to reach its $145 daily trendline.
Steven Strazza, the director of research at All Star Charts, in an X post dated Dec. 17 reiterated this point and said, "Momentum not even close to oversold."
He added that semiconductors are getting back in gear and the magnificent seven are making new all-time highs. As per his analysis the stock has, "Very clean and clear support level holding."
The technical analysis of daily moving averages indicates a strong bullish trend
The stock ended at $140.22 apiece on Tuesday. This was above its eight and 20-day simple moving averages, of $133.85 and $137.17, respectively. As per Benzinga Pro data, its current stock price was also higher than the 50-day moving average of $139.76 and its 200-day moving average of $116.91.
This implies that the stock is in an uptrend. On the other hand, the relative strength index of 54.12 suggests the stock’s movement is moderately strong and it is not yet in an overbought zone.
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Why It Matters: Earlier last week, Jim Cramer warned of a potential market correction for Nvidia on X, citing its recent surge and lack of a “crescendo moment.” He predicted a “vicious” and “fast” reversal. This comes as Nvidia faces an antitrust investigation in China over its 2020 acquisition of Mellanox Technologies.
TF Securities analyst Ming-Chi Kuo expects the investigation to remain unresolved in the near term, drawing parallels to Qualcomm Inc‘s QCOM 15-month antitrust case in China.
Price Action: Shares of Nvidia are up 4.84% over the last five days and 191.09% on a year-to-date basis, outperforming the Nasdaq 100, which was down 0.83% in the last five days and up 31.67% over the year.
According to Benzinga, Nvidia has a consensus price target of $170.56 based on the ratings of 40 analysts. The highest price target out of all the analysts tracked by Benzinga is $220 issued by Rosenblatt as of Nov. 21, 2024. The lowest target price is $120 issued by New Street Research on Aug. 6, 2024.
The average price target of $154.67 between DA Davidson, Phillip Securities, and Truist Securities implies a 10.67% upside for Nvidia.
Image via Shutterstock
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