NVIDIA shares correct as rally loses momentum

NVIDIA shares are now undergoing a correction after reaching a local high, prompted by news of a potential $100 billion investment in OpenAI. This triggered profit-taking and a technical pullback, with the price closing at $178.54 on Tuesday, September 23.

A bearish divergence in the On-Balance Volume (OBV) signals a decline in bullish momentum. Although quotes hit a new peak of $184.31 on September 22, the indicator failed to validate this high, recording just over 10 million. This typically implies the ascent was fueled by retail investors, thus making it prone to a correction. Nevertheless, the OBV also did not corroborate the precipitous price decline on September 23, suggesting that market players may be anticipating the stock to attain more substantial levels in the future.

Although the Stochastic Oscillator (5, 3, 3) shows positive momentum, with the %K line above the %D one in the neutral zone, slowing dynamics are currently causing shock ripples. The ongoing rise of the lines amid falling volumes poses a risk of reversal, suggesting that the surge may be short-lived and lacks support from new, robust buyers. Therefore, a pullback is likely to occur in order to boost liquidity. 

Heightened concerns form the underlying context. While the OpenAI deal and the Stargate project's backing offer future promise, the growing interest in "circular" financial arrangements and excessive AI infrastructure spending are inducing short-term unease among investors. Significant resistance stays at 185.00, close to which sell orders are clustered, and solid support is materializing in the 170.00–174.00 range.

Despite deteriorating technicals and a cloudy fundamental picture, the price is poised to test the 170.00–174.00 support area before making another run at the 185.00 resistance level prior to October 1.

Consider the following trading strategy:

Expect a rebound from the 170.00–174.00 zone. Then, buy NVIDIA shares upon confirming momentum recovery. Take profit: 185.00. Stop loss: 163.50.

This forecast is valid from September 24 to October 1, 2025.