Nvidia Stock on Fire: Can it Sustain its Winning Streak?

Nvidia Stock


The price of Nvidia stock has been on fire recently, and it is currently seeking to notch its 10th weekly rise in the previous 11 weeks. Here is how you should trade it right now.

The Rise of Nvidia Stock

Throughout the previous few years, Nvidia has been one of the technology stocks that has performed the best, and its latest surge has simply added to the momentum that it has built up. Since late 2020, the price of the company’s shares has been gradually climbing, and they’ve had a significant spike in the most recent few months. The price of Nvidia’s stock has reached an all-time high as of the time this article was written, and it has increased by about 20% in just the last month alone.

Nvidia is a dominant force in the gaming and data center businesses, both of which have shown remarkable growth in recent quarters, which bodes well for the company’s future prospects. In the most recent quarter, the company’s revenues from gaming saw a year-over-year growth of 37%, while revenues from its data center saw a year-over-year increase of 16%. These impressive results can be attributed to the rising demand for graphics processing units (GPUs) manufactured by Nvidia. GPUs are utilized for a variety of purposes, including gaming and data center applications.

The stock of Nvidia (NASDAQ:NVDA) has been performing exceptionally well as of late.

Before the recent increase in market volatility, Nvidia and Tesla (NASDAQ:TSLA) were the two market leaders for U.S. equities.

Nvidia stock and Tesla stock were the workhorses of the rally, despite the fact that other companies were also doing well, as evidenced by the S&P 500 and Nasdaq reaching their year-to-date highs with respective gains of 9.25% and 17.2%.

The stock of the industry leader in graphics chips has increased by 69% so far this year, while that of the market leader in electric vehicles has increased by 47%.

While Tesla stock has been going down recently, Nvidia stock has just achieved new highs for multiple quarters in a row. (It is important to point out that Advanced Micro Devices (NASDAQ:AMD) likewise continues to trade fairly strongly, too, as semiconductors continue to power higher.)

Nvidia is up against stiff competition from other technology companies such as AMD and Intel, both of whom are also making significant investments in the gaming and data center areas. Nvidia’s market share could decrease as a result of this rivalry, which would also put pressure on the company’s profitability.

The general performance of technology equities has been very positive, particularly in light of the recent anxiety surrounding the regional banking sector.

Over the past week or two, the ongoing resilience of the Nasdaq has been a factor that has helped to stabilize the stock market in the United States.

Trading Nvidia Stock

When you consider everything that has happened over the past week, the fact that Nvidia stock has managed to post three consecutive days of gains is very remarkable. If the stock ends the week with a higher price than it started, it will be the tenth time in the last 11 weeks that it has posted a weekly gain. That is especially noteworthy in light of the macroenvironment in which we’ve been operating.

During the rally that began at the beginning of February, Nvidia stock encountered resistance at the 50% retracement level from the all-time high in 2021 back down to the low point in 2022.

After the release of the results, the share price immediately shot up over that mark, and ever since then, the level that had previously served as resistance has been acting as support.

Because Nvidia stock is once again making new highs, it has broken through the barrier of resistance located in the low 240s. This paves the way for a price of $250, which is approximately where it is trading right now, followed by a range of $255 to $258.

This region represents the retracement of 61.8% of the range that was stated before as well as the extension of 161.8% of the most recent downturn.

While looking at the bearish side of things, the bulls will likely start to search for support from the rising 10-day moving average very soon. However, the area between $225 and $228, in addition to the moving average for the past 21 days, has consistently functioned as a reliable support level.

If the price of Nvidia stock drops below $224 and stays there for an extended period of time, bears will have a clear path to the low $200s as well as the rising 50-day moving average.

Yet, based on the charts of the present market, Nvidia continues to be one of the top companies for investors to hold at this time.

The recent success of Nvidia has been outstanding; however, it is essential to take into account the dangers that are faced by the firm as well. Although there are a number of factors that are driving Nvidia’s growth, such as strong demand for gaming and data center products, expansion into new markets, and partnerships and collaborations, there are also risks, such as competition from other companies, dependence on key customers, and regulatory and legal risks. Despite these risks, there are a number of factors that are driving Nvidia’s growth. As a result, potential investors ought to give serious consideration to all of these aspects before investing in Nvidia.

Featured Image: Megapixl © Savconstantine

About the author: Valerie Ablang is a freelance writer with a background in scientific research and an interest in stock market analysis. She previously worked as an article writer for various industrial niches. Aside from being a writer, she is also a professional chemist, wife, and mother to her son. She loves to spend her free time watching movies and learning creative design.