Nvidia Triggers Technical “Sell” Signal

According to technical analysis, during Friday November 8th’s trading session, a “Sell” signal was been triggered on Nvidia Corporation’s stock . The sell signal is categorized as a Bearish Three Gap Ups pattern which has been confirmed with prices dropping below the key level of $147.64, indicating a potential trend reversal.

Market Outlook

Analysts maintain a positive outlook on NVIDIA, with the average 12-month target price at $151.63 and a consensus rating of Strong Buy from 43 analysts. Stock Target Advisor’s analysis shows a Slightly Bullish stance, supported by 10 positive signals and 6 negative signals. NVIDIA’s last closing price of $147.63 represents strong short-term gains of +9.03% in the past week and +11.29% over the past month.

Technical Analysis and Bearish Pattern Confirmation

The Three Gap Ups is a bearish reversal pattern that appears at the peak of an uptrend, signaling potential exhaustion of the upward momentum. The pattern is made up of three consecutive days where each day’s opening price gaps higher, creating a stretched and overbought market condition. Typically, this leaves the stock primed for a pullback or trend reversal. Confirmation of this reversal pattern comes with today’s black-bodied candlestick, which closed below the confirmation level, generating the “Sell” signal.

This technical analysis suggests that the market is possibly at a peak or near the start of a correction phase, as traders increasingly agree on the bearish sentiment. As a result, the recommendation is to close long positions here, as a risk off stance has been identified.

Strategy Moving Forward

For traders who follow technical signals closely, today’s confirmed reversal pattern implies that the recent rally may have run its course, and NVDA might experience a downtrend or increased volatility. The recommendation to sell aligns with these indications, and as the market shows signs of hesitation at this level.

However, the overall outlook for NVIDIA Corporation (NVDA) remains bullish based on 10 positive fundamental indicators, despite the recent short-term Sell signal triggered by technical patterns.