Bearish turn for NVIDIA amid geopolitical headwinds

NVIDIA shares have faced a tempest of volatility and selling pressure in recent trading sessions, ending Tuesday at $177.77. Such a sharp downturn was ignited by a sudden flare-up in geopolitical risks. President Trump's renewed threats to impose tariffs on European allies sent shockwaves through the market, rekindling fears of a full-blown trade war. This triggered a broad flight from risky assets, with investors hastily exiting high-growth tech stocks.

Compounding this bleak macroeconomic picture are NVIDIA's intensifying operational headwinds in its key export destination—China. Despite obtaining US clearance to transport its H200 chips, the company hit an unexpected wall: Asian customs have blocked their entry, and Beijing has reportedly instructed domestic tech firms to refrain from purchases. This directly jeopardizes a projected revenue stream tied to over 1 million anticipated orders.

The storm clouds darken further amid rising tensions in Washington over the chip export policy itself. Lawmakers such as Brian Mast have publicly accused NVIDIA of bolstering China's military capabilities. Their push for legislation that could grant Congress a veto over such sales introduces a new layer of regulatory peril, casting a long shadow of uncertainty over the company's business strategy. 

The technical landscape mirrors this fundamental unease, signaling a clear corrective phase. Tuesday's Doji candle, with its long upper wick and close at $177.77, points to indecision after the head-and-shoulders pattern was completed. Its second shoulder was finalized yesterday, and such a formation typically precedes further downside. Meanwhile, the Chaikin Oscillator's negative readings and downward slope reinforce this narrative by highlighting dominant selling volume and confirming a bearish corrective phase. 

Pay attention to the trading strategy outlined below:

For now, the best plan is to sell at the current price or when the market bounces back to present levels. Lock in profits at $169.00. Set Stop loss at $185.00.

The forecast holds true from January 21 till January 28, 2026.