The Bull, Bear Case For Nvidia Stock During The GPU Technology Conference

Nvidia Corporation NVDA was trading over higher on Thursday after Needham upped its price target on the semiconductor stock.

The firm’s analyst Rajvindra Gill maintained a Buy rating on Nvidia and raised the price target from $270 to $300, stating that Nvidia’s strong price action is due to the company’s GPU Technology conference, which kicked off on Monday and wraps up Friday. 

Following the keynote speech on Tuesday, several analysts weighed in on the stock, with most upping price targets. 

Thursday’s spike higher wasn’t enough to break Nivida up from the top of Wednesday’s range, however, which caused the stock to form an inside bar pattern. An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."

Either a double or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

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The Nvidia Chart: Nvidia’s inside bar pattern would usually lean bullish, because the stock is trading in an uptrend and Thursday’s trading range is taking place near the top of Wednesday’s range. Nivida’s relative strength index (RSI) is measuring in at about 75%, however, which indicates the stock is overbought, which could cause a retracement to the downside on Friday.

• If Nvidia breaks up from Wednesday’s mother bar later Thursday or on Friday, the stock is likely to find its local top quickly because a push higher will raise Nivida’s RSI even further. If Nivida continues to consolidate sideways, the stock’s RSI will slowly decline, which could give Nivida the power for another push higher.
• If Nvidia breaks bearishly from Wednesday’s range, bullish traders want to see the stock form a bullish reversal candlestick, such as a doji or hammer candlestick, above $251.30 — otherwise the uptrend will be negated.
• Nvidia may also find support at the eight-day exponential moving average (EMA), which has been pushing the stock higher since March 14.
• Bearish traders want to see Nvidia break own under the eight-day EMA on higher-than-average volume, which could indicate the uptrend is over and a downtrend will begin.
• Nivida has resistance above at $288 and $314 and support below at $272.29 and $252.29.

Photo courtesy of Nvidia.