NVIDIA (NVDA) - Daily Chart

A breakout to new highs presents an excellent opportunity.

This is one of my fundamental approaches to chart analysis.

Why is that? In the market, there are both buyers and sellers.

When the battle between buyers and sellers is evenly matched, the market enters a range-bound phase.

A breakout to new highs signals that this balance of power has shifted decisively in favor of the buyers.

Here’s why: until the breakout, both buyers and sellers could have been in profit or loss.

However, the moment the price breaks to a new high, all buyers are in profit, while all sellers are in the red.

Now, let’s consider the scenarios where the trend continues after the breakout versus when it struggles.

What do you think?

In my view, the support-resistance flip is crucial after a breakout.

A support-resistance flip means that the previous high, which acted as resistance before the breakout, becomes a support level after the breakout.

If this new support level holds and functions effectively, the support-resistance flip is successful, making it easier for the trend to continue.

On the other hand, if the flip fails, it suggests that buying momentum has weakened, making a market reversal more likely and the trend continuation more difficult.

So, what will happen with this stock?

Let’s keep an eye on it and watch how it unfolds!