NVDA: What Lies Ahead Following A Massive Breakout

1月10日

NVIDIA (NVDA) shares broke out in one of the cleanest moves you’ll come across. The current 4-day rally is now more than 12% - the best such stretch since the chip designer posted its now-famous earnings blowout and incredible guidance figures in May 2023. NVDA’s rally has helped the Information Technology sector reclaim losses to start 2024. But where will the stock go next? Let’s put on our technician hats and investigate.

Following the quarterly results posted in the second quarter of 2023, NVDA went on to trade in a trading range between support near $400 and resistance around $510. That $110 zone is key as we can now add that on top of the $510 level to arrive at a bullish upside measured move price target to $620. That means roughly 14% more upside from the current price.

It will be key to watch for a possible pullback to $510 – what was once resistance becomes new support. As it stands, implied volatility on NVDA is moderate at 36%, and the company’s next earnings report is not due out until February 21. So, we may have to pay closer attention to what its industry peers have to say in nearer-term Q4 profit reports. As for NVDA’s valuation, following the technical breakout, the company trades 43.4 times 2024 consensus operating EPS forecasts and under 27 times out-year EPS estimates.