Nvidia Stock Continues To Break Out Past Resistance: What's Next?

NVIDIA Corp. NVDA shares gained ground Tuesday, with the strength attributed to news that Facebook plans to increase capital spending, including data centers, servers and network infrastructure, which could benefit chip companies.

Nvidia was up 6.7% at $247.17 at the close Tuesday. 

Nvidia Daily Chart Analysis

• The stock is pushing higher after breaking out of what technical traders call an ascending triangle pattern.
• The $210 level was where the stock was holding as resistance in the past, but as the stock was able to break past the area and retest it as support and hold, the stock may now hold this area as support in the future.
• The stock trades above both the 50-day moving average (green), and the 200-day moving average (blue), indicating the stock is seeing bullish sentiment.
• Each of these moving averages may hold as a possible area of support in the future.
• The Relative Strength Index (RSI) has been moving higher the past few weeks and sits at 76. This pushed higher into the overbought range, and the stock has been seeing much more buying pressure than selling pressure.

What’s Next For Nvidia?

Bullish traders are looking to see the stock continue to break out. Eventually the stock will start to cool off and bulls are looking to see a period of consolidation where the stock is able to hold its gains. This may allow the stock to continue to move higher in the future.

Bearish traders are looking to see the stock start to cool off and lose the gains it made. Bears are hoping the stock will fall back below the $210 level and begin to hold the level as resistance again. Bears are also looking for a drop below the moving averages for a possible change in sentiment.