Today’s stock of the day is NVIDIA, which has been on a notable decline since its earnings report, despite the results surpassing expectations. This drop highlights a classic technical pattern in motion—a triple top formation—suggesting further bearish momentum in the near term.
The triple top is clearly defined by the green rectangle on the chart, with the peaks aligning against a horizontal resistance marked in red. This pattern reflects multiple failed attempts to break higher, signaling a loss of bullish momentum. Yesterday, the critical development was the breakout below the neckline of this formation, marked with a black horizontal line. This breakdown confirms the triple top and provides a technical signal to sell.
The immediate target for this movement lies on the yellow horizontal support. This level is crucial, as it represents the next significant area where buyers might step in to stabilize the price. However, until this support is reached, the bearish sentiment is likely to dominate.
Once the price approaches the yellow support, it opens two potential scenarios. A bounce off the support would create an opportunity for traders looking to initiate long positions, capitalizing on a potential recovery. On the other hand, if NVIDIA fails to hold this support and the price breaks below, it would provide an invitation to sell further, signaling a continuation of the downtrend.