NVIDIA stock faces potential pullback to $150

NVIDIA stock, which took a nearly 20% beating in November, has begun to recover since early December. Corporate shares managed to break the back of the monthly downtrend, thus opening the door to $195. However, reaching this level could be a case of "what goes up must come down," as a head-and-shoulders pattern may form on the daily chart, potentially targeting the $160–$165 range. Taking a step back and looking at the bigger monthly picture, the floor is likely to fall out even further, with no strong support in sight until the long-term trendline comes at around $150.

Technical indicators are now waving red flags, suggesting another round of correction. The RSI has just left the danger (overheated) zone, and the Stochastic Oscillator has turned the tide after a sell signal. Quotes have fallen below the upper Bollinger Band, a clear sign that the previous rally lost momentum. Bulls are likely to stay on the sidelines until the price stabilizes near the middle Bollinger Band. 

Yesterday, shares received a temporary boost on news that Donald Trump had thrown them a lifeline by approving exports of H200 chips to China. NVIDIA CEO Jensen Huang has long argued the old ban handed US rivals a $50 billion market on a silver platter and pumped up their profit margins. Although the gates are now open, analysts aren't celebrating; the reaction has been lukewarm at best.

According to the Financial Times, Chinese officials have instructed artificial intelligence (AI) developers to prioritize domestic chips over American products. Even with a slight thaw in US-China relations, Asian authorities are playing the long game to wean themselves off foreign solutions. While Beijing firms would love to have NVIDIA's top-shelf Blackwell and Rubin chips, those remain off the table due to export restrictions. With capable national alternatives already on the block, the H200 one is unlikely to fly off the shelves.

Here's the strategy for your trading down below:

Sell NVIDIA stocks in the $185–$195 range. Lock in profits at $150. Set Stop loss at $205.