All eyes are on NVIDIA (NVDA) as the AI leader tests technical support and a major “trust fall” price level are within 6% of today’s closing price.
Shares of NVIDIA tried to bounce back from Tuesday’s widespread panic selling as investors tried to look beyond news that the Department of Justice had delivered subpoenas in connection with their antitrust investigation.
The “trust fall” price that NVIDIA needs to bounce from over the next few trading session is $100.
This price helped to provide support for the stock in early August. Shares tried to close below $100 over five trading days – from 8/2-8/8 – with only one of those days actually posting a close below $100.
A successful “test” of that $100 price level would recharge investors and traders as it would represent a “double bottom”, one of the most reliable technical patterns a stock can form.
Options investors are starting to draw some lines on NVIDIA that match with that $100 “line in the sand”.
Options traders have increased their activity in the October $100 put option contracts on NVIDIA.
Traders buy put options to profit when a stock like NVIDIA moves lower, or to hedge their positions.
A spike in activity on the $100 puts indicates that the options market is preparing for the growing possibility that NVIDIA will move below $100 and lower.
For more detail on NVIDIA’s price chart and short-term target price, watch my most recent YouTube video on NVIDIA.
NVIDIA remains in a long-term bullish trend with a price target of $175.
Tesla (TSLA) shares moved against the grain of the market on Wednesday after the company’s stock price jumped more than 5%.
Shares got a bump from news that the EV manufacturer has seen an increase in sales in China. The increase is notable as Chinese consumers have been pulling back on spending amid economic weakness in the region and a housing market that continues its precipitous drop.
Today’s headlines also report that Tesla is aiming to introduce the robotaxi at a Warner Brothers studio. That news is the heavier driver of today’s buying as investors have been raising their expectations that the robotaxi will be the larger driver of revenue for Tesla over the next 5-10 years.
Tesla stock has been outperforming the Nasdaq 100 and other Magnificent Seven stocks since it’s bottom at $150 ahead of the company’s April earnings report.
Shares trade 55% higher than those lows, though the stock did trade with more than 90% gains in early July.
The stock’s recent pullback just found support at “double 200”.
First, the stock’s 200-day moving average, which is in a bullish trend.
Second, the $200 price level as round numbers are extremely influential from an investor psychology perspective
Investors should expect that a move above $225 will begin another wave of buying as the stock is far from overcrowded. That rally would target the stock’s next relative high of $300 within the next 3-6 months.
Tesla shares remain long-term bullish with a price target of $300.
Apple (AAPL) shares are facing a critical support battle.
The stock has performed strongly since its April lows at $170 with the stock trading near $220, a 35% gain in value.
That said, the stock has been trading in a wide range near its recent highs as investors have been tepid about adding to most large cap technology positions. For the most part, Apple has traded between $220 and $230 since early July.
More recently, the stock has slipped to its critical 50-day moving average, currently at the bottom of that trading range, $220.
Amazon (AMZN), Microsoft (MSFT), and NVIDIA (NVDA) are already trading below their respective 50-day moving averages.
A break below that trendline will increase selling pressure on Apple shares as investors react to the fear of a volatile September.
Investors looking for a short-term buying target should monitor the $200 price on Apple shares.
This price point supported the stock in early August and has the support of Apple’s 200-day moving average just below at $195.
Apple shares remain in a long-term bull market trend with a target of $300.
