Yesterday was a tough day for NVIDIA, with the stock experiencing a significant drop of more than 6%. The session started on a high note, with the price initially trading near long-term highs, but the optimism quickly faded as sellers took control. By the end of the day, NVIDIA closed at the $140 mark, which holds significant technical importance.
Firstly, the price action resulted in one of the largest bearish candles in recent memory. This drop also confirmed a false breakout above the $150 resistance level, a critical area that had acted as a ceiling back in November. Together, the false breakout and the massive bearish candle suggest a shift in sentiment toward the downside.
As long as the price remains below the $150 level, the likelihood of a deeper bearish correction increases. Sellers now have a clear opportunity to capitalize on this momentum. Adding to the potential for further downside is the presence of a black dynamic uptrend line, which currently serves as a critical support level.
A breakdown below this uptrend line would solidify the negative sentiment and could act as a strong confirmation for further declines. Until then, the stock is in a precarious position, with $150 acting as a key pivot point for traders to watch closely.