Nvidia Stock Price and Forecast: Why did NVDA stock fall 3%?

Nvidia stock finally has a down day after all-time highs.
NVDA stock still set more all-time highs on Monday.
NVDA stock is still up enormously for the year so far.

Ivan Brian FXStreet

Nvidia (NVDA) put in a fairly sharp drop on Monday as most markets turned lower on the news of Fed Chair Powell being reappointed. While Powell is not as doveish as Brainard, he still has presided over possibly the loosest period in US central bank history, so this latest drop was merely a case of "buy the rumour, sell the fact" as small lingering hopes over Brainard caused some selling. Nvidia is one of the high-flying stocks of 2021, and so it took a disproportionate hit as investors cashed in.

Nvidia (NVDA) stock price and news

After the set of strong results, news flow has died down a bit on this one. We do note some directors are selling now that the company earnings are out of the way, but it is nothing too alarming. The bigger transaction is a sale of 10,000 shares by one of the directors. The semiconductor sector though remains along with EVs possibly the hottest sector of the year, and we do not see much changing heading into early 2022. NVDA has already upped guidance for the next quarter, so that should continue the recent strong momentum. While we did note that revenue growth rates were slowing, they are slowing from a high level.

Nvidia (NVDA) stock forecast

The short-term 30 minute chart there offers huge support for short-term traders at $301. This is the recent point of control, and there is a huge volume profile at this level. Breaking $295 sees volume thin out alarmingly, meaning a quick move to $250 could be in the cards if broken.

The daily chart below shows the powerful move is still holding, but have some caution from the stochastic crossover yesterday. This with a divergence from the RSI does give us some concern going forward. Above $313 though, NVDA remains strongly bullish.

NVDA daily chart

Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

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