Sell NVIDIA shares ahead of Fed decision

Since the start of the week, NVIDIA shares have been caught in a perfect storm. On Monday, July 27, the stock plunged nearly 5%, closing at $196.58 in the following session. What triggered the sell-off? News that the semiconductor titan is negotiating a massive $250 billion financial guarantee for its OpenAI data center in Ohio, with another $350 billion in chip funding reportedly on the table. Investors are spooked. The market's message is loud and clear: the company's balance sheet is taking on mounting risks, and the cost of credit protection has spiked to all-time highs. To put it briefly, traders anticipate a period of fiscal strain for the AI leader.

But the bad news doesn't stop there. As if that weren't enough, China is stepping up its game. CXMT's IPO and domestic lithography production breakthroughs are narrowing the gap with Western chipmakers faster than anyone expected. As a result, the semiconductor sector in Asia has been hit hard, and NVIDIA is currently caught in the crossfire.

Now, let's talk about the other side of the Atlantic. Adding to the unease, the Federal Reserve's (Fed) interest rate decision is due today, July 29. Any hint of monetary tightening in 2026 could send the stock into another tailspin. This is a risk that no one can afford to ignore. 

From a technical perspective, the picture is bearish. Earlier, NVIDIA closed at $196.58, beneath the Bollinger Band midline ($202.71). Right now, it is hovering in the lower half of the range, with support near $191. The Stochastic Oscillator is flirting with oversold territory, suggesting that, although pressure persists, the downside may be limited in the short term.

For those ready to make a move, here is the trading plan:

Sell NVIDIA shares at $197. Lock in profits at $189.50. Place Stop loss at $203.00.

This forecast is valid from July 29 till August 5, 2026.