‘Beautiful cup and handle’ hints at massive breakout for Nvidia stock

After a downturn in early September, Nvidia (NASDAQ: NVDA) is showing signs of recovery, with NVDA shares rising 5.81% over the last five sessions to $116.78 and up another 0.59% in extended trading to $117.50 at press time. 

NVDA stock 5-day price chart. Source: Finbold

Technical analysis (TA) of NVDA stock also hints at a strong and continued rally. 

Per the popular analysis published by a TradingView user, ‘impossiblebull,’ the chipmaker has formed a ‘beautiful’ Cup & Handle pattern on the hourly chart just after managing a ‘massive breakout’ from a Descending Broadening Wedge.

A Cup & Handle pattern forms when a stock’s price drops before rebounding to its original value, followed by another, smaller drop and a subsequent recovery. It gets its name from its appearance on price charts and is generally viewed as a bullish signal.

The new pattern is indicative of a continuation of the recently established bullish trend and the expert behind the analysis believes $130 – an NVDA stock high not seen since mid-August – could be the next stop for the semiconductor giant.

NVDA stock chart showing the Cup & Handle pattern. Source: impossiblebull on TradingView

Could Nvidia stock go even higher than $130?

On the morning of September 16 – approximately two days after publishing the initial Cup & Handle chart pattern – impossiblebull added that Nvidia shares are also forming an inverse head & shoulders pattern. 

NVDA is also forming an Inverse Head & Shoulders. Combined with the Cup & Handle, this breakout could be pretty substantial if it does decide to run. Almost finished completion of the right inverted shoulder. Stay Tuned!

The two, when combined, indicate that the upcoming rally could be substantial, potentially breaking above the originally predicted $130.

An earlier assessment, published on September 16 by TrendSpider, for example, indicated that the key Nvidia stock levels investors should watch out for at $106.19 – a strong support zone – and the previous high of $131.26.

Bullish trend for Nvidia shares offers reprieve after a bloody start to September

The bullish forecast for the semiconductor giant’s shares is most welcome, given there has been some persistent uncertainty about the stock’s future since the start of August.

NVDA stock – along with most of the stock market – has been experiencing a series of shocks since the employment report was published as the calendar was tipping to August. 

Nvidia shares’ most recent major downturn, recorded at the beginning of September, even saw NVDA stock briefly plunge below $100 for the second time since May – once the June stock split is accounted for.

Along with the recent downturns, many investors have been wary of a potential artificial intelligence bubble, with Nvidia generally seen as the prime candidate for a fall should there be a bursting.

Street experts chip in on NVDA stock’s future

Harry Dent, a prominent financial author, proved just how dramatic these concerns can be all the way back in June when he forecasted a 98% collapse for NVDA should the AI boom halt.

Still, the bulk of the comments pertaining to Nvidia stock has been – both in September and in the preceding months – positive. 

Throughout the turbulence, NVDA has maintained an overall ‘buy’ rating. 

Jim Cramer, for example, strongly hinted at his belief the September downturn was the result of investor panic, and not a fundamental issue with the chipmaker’s business.

Elsewhere, Wedbush’s Dan Ives seemingly echoed Nvidia CEO Jensen Huang’s comments about the start of a new industrial revolution when he opined that ‘tech spending on AI remains a generational 4th Industrial Revolution.’

Buy stocks now with eToro – trusted and advanced investment platform


Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

Source: https://finbold.com/beautiful-cup-and-handle-hints-at-massive-breakout-for-nvidia-stock/