NVDA breaks below key technical support level
NVIDIA Corporation (NVDA) Technical Analysis Report for Dec 07, 2018 | by Techniquant Editorial Team
NVDA ended the week -9.68% lower at 147.61 after losing $10.68 (-6.75%) today, significantly underperforming the Nasdaq 100 (-3.3%) following today's NFP report. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 150.81, the market confirmed its breakout through the prior session low after trading up to $5.19 below it intraday.
Daily Candlestick Chart (NVDA as at Dec 07, 2018):
Friday's trading range has been $13.25 (8.36%), that's above the last trading month's daily average range of $10.24. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NVDA.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bearish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Last Engulfing Bottom Pattern which is known as bullish pattern and one bearish pattern, the Black Candle. The last time a Last Engulfing Bottom Pattern showed up on October 29th, NVDA gained 9.36% on the following trading day.
Prices broke below the key technical support level at 155.72 (now R1), which is likely to act as resistance going forward. After having been unable to move above 158.49 in the previous session, NVIDIA ran into sellers again around the same price level today, missing to move higher than 158.87.
Although the share is experiencing a short-term uptrend, this could just be a correction, as both the medium and long-term trends are still bearish.
With prices trading close to this year's low at 133.31, downside momentum might accelerate should the stock break out to new lows for the year.
Among the 10 market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Outside Bar" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for NVIDIA. Out of 118 times, NVDA closed higher 65.25% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 61.86% with an average market move of 2.07%.