Dow Jones futures, along with S&P 500 and Nasdaq 100 futures, fell early Tuesday as investors remained cautious ahead of a crucial week for markets. Nvidia (NVDA), a key driver of the technology sector, continued its decline, losing 4.2% on Monday after a 3.2% drop on Friday. The stock is testing support at its 10-week moving average, a critical technical level.
Nvidia's performance is closely watched due to its leadership in artificial intelligence. ai has been a major theme driving market gains in 2024. A break below the 10-week line with high trading volume could signal further decline. This may trigger broader weakness in technology indices like the Nasdaq. On the contrary, a strong rebound would suggest renewed investor confidence. This could offer a possible entry point for bullish investors in the ai sector.
Meanwhile, market participants are awaiting the release of the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, later this week. The data will provide critical information on inflation trends and could shape expectations about the Federal Reserve's policy path.
With uncertainty ahead, traders should remain vigilant, focusing on key technical levels and macroeconomic data to guide investment decisions.
Nvidia Stock Chart Analysis
NVDA/USD 15-minute chart
The 15-minute chart of NVIDIA Corporation (NASDAQ: NVDA) shows a consistent bearish trend over the past few sessions, with the stock falling from its high near $152.89 to its current level of $135.93. The price action indicates persistent selling pressure as lower highs and lower lows dominate the chart. The sharp drop around November 24 suggests further bearish momentum, likely driven by negative sentiment or external factors affecting the broader semiconductor industry.
The RSI (relative strength index) is currently at 29.18, indicating that the stock is in oversold territory. This suggests that a short-term rebound could occur, although the overall trend remains weak. Failed attempts to hold support levels near $138 and $140 further highlight the bearish outlook.
Key support is now around $135.50 as it lines up with the session low. A break below this level could accelerate selling pressure towards the next psychological support at $130. On the upside, resistance is visible at $138, and a sustained move above this level could attract buyers, which could lead to a pullback towards $140.
Traders should watch volume patterns and RSI divergence for signs of a reversal. However, it is advisable to proceed with caution, as the general trend remains bearish.
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