NVIDIA Corp (NVDA)

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Nvidia Stock Runs Into Resistance. Here’s How to Trade It Now
By: TheStreet | December 12, 2022

• Nvidia stock has rallied more than 50% from its October low. As it runs into the 200-day moving average, here's how to trade it now.

Nvidia (NVDA) stock slumped earlier this year, but it has found its footing and enjoyed a monstrous rally.

The graphics-chip specialist's shares bottomed on Oct. 13. Since then, the stock has posted a gain in seven of the past eight weeks and is up more than 57% during that stretch.

That move outpaces even Advanced Micro Devices (AMD) when it was trading at its highs from a few weeks ago.

While AMD stock has since suffered a 14% correction off the high from earlier this month, Nvidia stock made new highs on Friday.

But -- NVDA stock also rallied into a key resistance level on Friday, hitting the 200-day moving average for the first time since April.

When we last looked at Nvidia, the 200-day was a major upside target. We're there now, so let’s take another look at the charts.

Trading Nvidia Stock


Daily chart of Nvidia stock.

Chart courtesy of TrendSpider.com

Last week, the trend in Nvidia stock looked to be faltering. The shares opened below the 21-day moving average and the recent uptrend (blue line).

Nvidia stock looked as though it could be heading back to the low $150s or potentially even the low $140s and filling the gap at $142.11.

Instead, the shares broke to the upside and the stock pushed to its highest level since August.

With the CPI report on Tuesday and the Fed’s rate decision on Wednesday, there’s potential for all sorts of movement later this week — including with Nvidia stock.

Here’s how I would proceed.

A close over last week’s high of $175.83 — and thus the 200-day moving average — opens the door up to the declining 50-week moving average at $185.50, followed by the prior resistance zone between $190 and $195.

On the downside, a break of last week’s low at $156.67 not only triggers a weekly-down rotation but also puts Nvidia stock below its 10-day and 21-day moving averages.

That could very well open the door down to the gap-fill level near $142. Around that level, Nvidia stock also finds its 50-day moving average, 50% retracement and the daily VWAP measure.

For active bulls, this would be a reasonable dip-buying opportunity, with the obvious caveat being that the overall market isn’t enduring a full-blown meltdown.

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