Nvidia's reversal stuns the tech world. What the charts say happens next with the stock

Nvidia delivered strong earnings and guidance, but the stock’s post-report action was weak: it opened at $195.95, peaked near $196 then reversed as the opening gap filled and produced a bearish engulfing candle, with RSI failing to reclaim the midline. Expect a consolidation phase around the 50-day moving average with near-term resistance at ~$196 and support around $175; a break below that level could trigger a deeper sell-off toward the 200-day moving average near $153. Fundamentally the results remain a tailwind, so the likely path is sideways digestion before a resumption of the previous uptrend, though macro pressure from Bitcoin and Fed uncertainty could amplify volatility.

Analysis

Nvidia reported strong earnings and provided upbeat guidance, yet the immediate price action was negative: shares opened at $195.95, peaked near $196 and then reversed as the opening gap filled, producing a bearish engulfing candle. Coming into the print the stock had sold off nearly 12% from a recent high and rebounded to the 50‑day moving average, a technical setup that was undermined by the failed gap and intraday reversal.

Momentum failed to confirm a bullish pivot—RSI did not reclaim the midline—so near‑term dynamics point toward sideways consolidation around the 50‑day moving average with near‑term resistance at ~$196 and support around $175. The note highlights historical patterns (August 2023) where strong results were followed by digestion phases and that NVDA has been buyable when RSI dropped below ~35.

Downside risk is clearly defined: a break below $175 could extend toward the 200‑day moving average near $153 and would likely reflect broader market stress rather than a change in company fundamentals; the author views this as possible but not the base case given strong earnings and guidance. Macro cross‑currents—specifically Bitcoin weakness and Fed uncertainty—are cited as amplifiers of volatility, so near‑term trading should prioritize risk management despite a constructive fundamental backdrop.

Key Decisions for Investors

• Trim or take partial profits after the failed post‑earnings gap; treat rallies back toward $196 as potential sell/trim points
• Accumulate in tranches on confirmed weakness between $175 and $153, using the 200‑day moving average (~$153) as a deeper buy zone given strong earnings and guidance
• Implement near‑term protection (short‑dated puts or collars) to hedge against macro volatility from Bitcoin and Fed developments before increasing net exposure
• Use technical triggers to time size increases: add only after a sustained reclaim of the 50‑day moving average or RSI back above the midline, and tighten stops if price breaks below $175