Can Nvidia Rally Despite an Ongoing Bear Market?

Shares of Nvidia (NVDA) have broken their downtrend from late November. Prices are back above the rising 200-day moving average line but is this just a bounce or the start of a sustained move higher?

Let’s check the charts and indicators again.

In our Jan. 24 review of NVDA we concluded: “Continue to avoid the long side of NVDA. The decline in this stock is not over. Do not try to catch a falling knife.” NVDA retested the January low in February and earlier this month and held. Is the upside the path of least resistance now?

In the daily bar chart of NVDA, below, we can see that the shares are trading above the declining 50-day moving average line. The trading volume has been very active since early November. The daily On-Balance-Volume (OBV) line has been steady since its late January low.

The Moving Average Convergence Divergence (MACD) oscillator has been improving since late January and is just below the zero line and a potential buy signal.

In the weekly Japanese candlestick chart of NVDA, below, we can see a few lower shadows below $220 telling us that some traders have been rejecting the lows.

The weekly OBV line is still in a downward trend and the MACD is still pointed down towards the zero line.

In this daily Point and Figure chart of NVDA, below, we can see an impressive upside price target of $359. A trade at $272 or higher is needed to convince me.

In this weekly Point and Figure chart of NVDA, below, we can see a target of $367 — not much higher than the daily chart above.

Bottom-line strategy: NVDA has transitioned from a downtrend to a sideways trend the past several weeks. Strength above the February highs is needed to turn things more bullish. I would treat this as a trading affair until the daily OBV line moves above its November zenith.