Chart done on hourly candles. Nvidia shares closed near the week’s lows today following a sharp sell-off across all sectors. The semiconductor industry has been one of the leaders on the charts in the last few weeks, with Nvidia enjoying a boost of positive attention from ChatGPT and AI. The rally the stock has been on is starting to show some weakness, and it is overdue for a strong pull back. Nvidia’s price to earnings ratio is currently at 138, which is about 9 times higher than what’s considered a “healthy” price to earnings ratio, and even with the projected revenue from ChatGPT, the stock isn’t worth that much yet.
Looking at the short term charts Nvidia closed the day just above its 231.40 support, if the stock moves below that point in the coming days then it’s next downside target is 223.00-225.00. Bulls will need to take the stock back above 239.00 to potentially pivot back into an uptrend and retest the 244.54 resistance for a breakout.