Nvidia Stock Price Outlook: Technical Analysis Suggests More Pain Ahead

• Nvidia stock is trading below a key technical level after this week’s $600 billion rout.
• The decline comes amid investor concerns over DeepSeek, a new AI model from a Chinese startup.
• The next catalyst for Nvidia is likely to be its earnings report on February 26.

Nvidia stock is on thin ice as it trades below a key technical level for the first time since January 2023.

Shares of the graphics processing unit maker have plunged 16% since investors descended into a panic earlier this week over a new AI model from the Chinese startup DeepSeek.

The drop, which erased nearly $600 billion in Nvidia’s market value in a single day, sent the stock to its 200-day moving average.

That threshold is a closely watched technical indicator that helps identify the long-term direction of a trend. When securities fall below their 200-day moving average, it warns traders that the prior uptrend in a stock price could be on the verge of reversing course.

Nvidia stock closed below its 200-day moving average on Monday, jumped back above it on Tuesday and Wednesday, but then fell back below it during Thursday’s trading session.

The stock traded at $119.70 on Thursday, below its 200-day moving average of $122.28.

The back-and-forth trading above and below the key threshold suggests that Nvidia is trading at make-or-break levels this week.

Will Tamplin, a senior analyst at Fairlead Strategies, said the downside price action in Nvidia was a warning of more pain ahead.

“NVDA is seeing a hard test of its rising 200-day MA, near $122. We think the correction is likely to deepen further toward secondary support at roughly $110,” Tamplin told Business Insider in an email.

Tamplin said momentum in Nvidia stock is to the downside in the intermediate term, defined as two to four months, adding that the stock had yet to hit oversold territory, which suggests more downside ahead.

“From a long-term perspective, momentum has fallen off since mid-2024, meaning that the primary uptrend is likely to become shallower or turn into a trading range environment for 2025,” Tamplin wrote.

David Keller, the chief strategist at Sierra Alpha Research, told BI that the breakdown in Nvidia was significant considering that the stock had been in a trading range since early November.

Keller said it’s a concerning sign that there had been no immediate “buy the dip” activity in Nvidia stock since Monday’s sharp decline.

“Instead of an influx of buyers pushing NVDA back into the consolidation range, we’ve instead seen the price remain generally within the range of Monday’s action,” Keller wrote. “Until and unless NVDA can regain the $130 level, we would consider this chart guilty until proven innocent.”

Ari Wald, the head of technical analysis research at Oppenheimer & Co., said Nvidia stock was unlikely to enter an immediate downtrend, nor likely to resume its two-year uptrend.

Instead, Wald told BI that the stock should enter a sideways consolidation phase going forward.

“Typically, reversals out of a strong uptrend transition into a range rather than a downtrend meaning continued oscillations around the stock’s flattening 200-day average would be reasonable over the coming weeks to months,” Wald said via email.

Wald is watching $140 as a resistance level for the stock, as well as $100 for a level of support.

While he ultimately expects Nvidia to resume its uptrend in the long term “based on what we see as middle-innings, growth-led, secular advance,” Wald said, it makes sense for investors to wait for the uptrend to come back before buying the stock.

“A sidelines approach makes sense while the stock works off prior excesses through the balance of the current cycle,” Wald said.

And while Nvidia’s decline this week has been significant, it’s masking underlying strength in the broader market, Ryan Detrick, the chief market strategist at Carson Group, said.

“The bar is set quite high and these names need to report strong earnings to justify the current valuation,” Detrick told BI, referring to Nvidia and some other chip-related stocks. “But at the end of the day, rotation is the lifeblood of a bull market and to see rotation out of chips and into things like transports and financials” might not be “the worst thing,” he added.

Nvidia will get a chance to prove to investors that it’s worthy of its premium valuation when it reports earnings after the market close on February 26.