NVIDIA stock (NASDAQ: NVDA) is sending mixed signals to investors ahead of the new trading week. After closing with a marginal gain on Friday, pre-market data indicates a potential downturn at Monday’s open, setting up a critical test at its 52-week high.
For traders looking to capitalize on NVIDIA’s notorious volatility, understanding Friday’s price action and the key levels to watch is essential. This analysis breaks down the data to determine whether the market is likely to go up or down.
Friday’s Market Recap: A Battle at the Highs
Here’s a snapshot of the key metrics for NVIDIA from the last trading session:
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Closing Price: 157.99 USD
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Daily Change: +0.24 (0.15%)
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Pre-market (for Monday): 156.88 (-1.11 / 0.70%)
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Day’s High: 158.66
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Day’s Low: 155.96
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52-Week High: 158.71
The trading day was a rollercoaster. NVIDIA opened high at $158.40 but was immediately met with selling pressure, dropping to its low of $155.96 within the first hour. However, buyers stepped in, driving a strong recovery that saw the stock test its 52-week high late in the session. Despite this, the stock couldn’t decisively break out and is now indicating a weak open for Monday.
The Bearish Case: Will the Market Go Down on Monday?
Several factors suggest traders should be cautious and prepare for a potential downward move:
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Pre-Market Weakness: The most significant red flag is the pre-market price of $156.88, a substantial 0.70% drop from the close. This indicates that overnight and early morning sentiment is negative, and the stock is likely to open lower.
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Rejection at 52-Week High: The day’s high of $158.66 is just shy of the 52-week high of $158.71. The inability to break through this critical resistance level often signals that sellers are in control at this price. This could form a “double top,” a bearish technical pattern.
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Opening Sell-Off: Friday’s immediate drop after the opening bell shows that there was initial profit-taking or selling interest as soon as the market opened, a sign of underlying weakness.
The Bullish Case: Potential for a Reversal
Despite the bearish signals, there are reasons to believe the bulls could still take charge:
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Strong Intraday Recovery: The bounce from the day’s low of $155.96 was powerful and sustained. This price level has now been established as a strong intraday support zone. If the stock dips to this level on Monday and holds, it could be a prime buying opportunity for a bounce.
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Closing Near the Highs: While it didn’t break out, NVDA still managed to close near the upper end of its daily range, showing resilience.
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Breakout Potential: If the initial pre-market weakness is absorbed and buyers manage to push the price decisively above the $158.71 resistance, it could trigger a significant “blue-sky breakout,” attracting a flood of new buying momentum.
Is It Right to Invest Today (on Monday)?
Given the conflicting signals, a “wait and see” approach may be the most prudent strategy on Monday.
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For the Trader: The pre-market data suggests that buying immediately at the open is a high-risk move. The stock is likely to dip first. The key is to watch how it behaves at the established support and resistance levels.
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A potential strategy: Watch for the stock to open lower and test the support level around $155.96. If it holds firm and starts to bounce, it could present a lower-risk entry point.
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A bullish confirmation: A sustained move above the 52-week high of $158.71 would be a strong buy signal, but traders should be wary of a “false breakout” where it briefly pops above and then falls back.
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The immediate outlook for NVIDIA stock is bearish, driven by the negative pre-market data and the failure to break a key resistance level. Traders should anticipate a lower open on Monday. However, the stock has proven its resilience. The battle between the support at ~
158.71 will define the day’s trend. Prudent traders will watch these levels closely before committing to a position.
Disclaimer: This article is for informational purposes only and is based on an analysis of the provided image. It should not be considered financial advice. All investment decisions should be made with the help of a qualified financial professional.
