NVIDIA shares approach gap closure at $170.50

NVIDIA shares bounced back decisively from a one-and-a-half-month low last week but have since lost their gains. Quotes failed to hold above $180 and are now gradually sliding. The daily (D1) chart showed a gap between the September 9 and 10 trading periods. In order to close it, the price would have to drop to $170.50. Eliminating this gap is a top priority for NVIDIA sellers.

The technical picture lends credence to the scenario of declining quotes. The Stochastic Oscillator lines crossed in the overbought zone and turned downward, issuing a sell signal. For the first time since early May, the MACD indicator has entered negative territory. Another factor favoring the bears is the price's failed attempt to resume the medium-term uptrend that ended in late August. Even if the bulls try to regain the initiative, they will face strong resistance at $184 once again.

The reports of additional issues for NVIDIA in China contribute to the unfavorable outlook. The company has been accused of violating antitrust laws. If found guilty, the corporation could face a fine ranging from 1% to 10% of its annual sales in China. The situation stems from the acquisition agreement between NVIDIA and Mellanox, in which NVIDIA committed not to restrict chip sales in the Asian country. However, due to US tariff policies, fulfilling this obligation has become virtually impossible.

Decisions made by American officials are forcing NVIDIA to develop specialized products for the Chinese market. Nevertheless, according to Reuters sources, the latest RTX6000D chip is not gaining significant traction among Asian companies. Priced at $7,000, its performance lags behind that of the RTX5090 model. Even when supplied to China via intermediaries, the RTX5090 costs half as much. This creates an opportunity for other firms to capture some of NVIDIA’s market share out there.

The following trading strategy may come into play:

Sell NVIDIA at or below $180. Take profit: $170.5. Stop loss: $184.