Technical signals point to further decline in NVDA price

NVIDIA (NVDA) shares ended the previous trading session down 2.8%, reflecting a broader deterioration in market sentiment. The primary catalyst was a sharp decline in the U.S. Consumer Confidence Index, which dropped by 7 points to 98.3. This marks the steepest decline since August 2021. Analysts had expected the index to reach 102.5, but the weaker-than-expected data heightened concerns about an economic slowdown.

Amid this backdrop, the market is pricing in expectations of a potential twofold reduction in the Federal Reserve's (FRS) interest rate this year. This prospect has increased demand for safe-haven assets, reducing the appeal of technology stocks.

Additional pressure on the stock market stems from Donald Trump's policies, particularly those related to tax reforms and trade tariffs.

Attention is now focused on NVIDIA's upcoming earnings report, which could serve as a key driver for the stock's near-term direction. The company's financial results and forward guidance will be critical in determining whether the stock recovers or continues its decline. Positive report could support a rebound, while disappointing results may extend the downward trend.

Moreover, competition from China's DeepSeek is intensifying. The company recently reopened access to its core programming interface after a nearly three-week suspension, resuming a key service for artificial intelligence (AI) models. Since its launch, DeepSeek's latest model has gained significant traction, increasing competitive pressure on NVIDIA.

From a technical analysis perspective, on the daily chart (D1), NVDA's price has broken out of its ascending channel. This suggests a potential shift to a downtrend. The former channel support level now acts as resistance, and after a retest, the price resumed its decline.

Meanwhile, the Relative Strength Index (RSI, 14) remains at elevated levels, indicating the price being in the overbought zone. This increases the likelihood of further price weakness.

Today's release of NVIDIA's financial report could prove to be a turning point for the stock.

Signal:

Short-term outlook for NVDA: Sell

Target price: 103.30

Partial profit-taking level: 116.00

Stop-loss level: 144.00

The bearish trend is short-term, so a trading volume should not exceed 2% of your balance.