Shares in Nvidia surged nearly 150% higher in 2020, helped by the boom in cryptocurrencies. The company has experienced phenomenal growth has its graphics processing units (GPUs) are used heavily by cryptocurrency miners.
Reports have even circulated that the company could start to make specialised cards for cryptocurrency miners. However, Nvidia’s executive vice president and chief financial officer, Colette Kress, recently commented that the demand from the gaming sector is much larger than demand from crypto miners.
In the bigger picture for the business, the company’s $40 billion acquisition of UK chip designer Arm has investors on edge as it comes under scrutiny from UK and EU regulators. Nvidia’s rivals have called for the deal to be blocked.
This has created a trading range for the company’s share price at the top of a very long-standing trend, as the chart below shows:
Get our Weekly Commitment of Traders Reports: - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Source: Admiral Markets MetaTrader 5, #NVDA, Weekly – Data range: from Oct 29, 2013, to Feb 9, 2021, performed on Feb 9, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
The trading range for the company’s share price comes before the release of its last quarterly earnings announcement which is due on 24 February. The uncertain outlook regarding the acquisition has also caused some uncertainty in the stock’s price.
Looking at the range more closely on the daily chart shown below, it’s clear to see the ascending triangle pattern that has formed. This pattern typically exhibits a series of higher lows which create an ascending trend line, as well as a series of rejections at a fixed price level creating a horizontal resistance line.
Some traders may choose to trade in-between the ascending triangle formation and off the horizontal resistance line and ascending trend line. As the pattern represents a bullish formation, some traders will wait for the market to break out from upper resistance and may position themselves early on.
Source: Admiral Markets MetaTrader 5, #NVDA, Daily – Data range: from May 6, 2020, to Feb 9, 2021, performed on Feb 9, 2021, at 8:35 pm GMT. Please note: Past performance is not a reliable indicator of future results.
A break from the $583.00 price level, could see the stock run higher by at least $100 which is the size of the ascending triangle formation when it first developed.
Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on this index and thousands of other instruments across Forex, stocks, indices, commodities and more?
You can get this indicator completely FREE by upgrading your MetaTrader 5 trading platform provided by Admiral Markets UK Ltd to the exclusive Admiral Markets Supreme Edition! You’ll also receive a whole range of advanced trading tools such as correlation and sentiment indicators!
Start your free download by clicking on the banner below:
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.