Nvidia: Big Price Changes Coming

What is happening?

Since the market crash in March 2020, Nvidia gained 350% and reached an incredible $835 per share. This significant result was caused by terrific growth in video gaming and huge demand for graphic cards, thanks to the cryptocurrencies boom.

Things have changed after the huge correction in the crypto market. Graphic cards lost 20% during June from their prices after the demand drop caused by Bitcoin and Ethereum prices crash.

A story like this has already happened. In 2018 Nvidia got hurt as miners decided to offload their graphic cards in the preowned market. The stock was dumped by 50%.

What does happen during shares get split?

Beginning on July 20^th, shares are expected to get a four-for-one stock split. It means NVIDIA stock is going to be 4^th time cheaper that makes it more available for retail investors. But don’t be so happy about it, as history knows stories about a massive stock’s prices drop after a split.

Tesla’s daily chart

Tesla’s stock dropped down by 51% after the stock got split on September the 1^st.

Apple’s weekly chart

Apple’s stock dropped down by 31% after the stock got split on September the 1^st.

How to trade?

In the previous article, we have described the situation NASDAQ index correction.  NVIDIA is one of the largest capitalization companies in NASDAQ, that is why the price will go down with the technology companies’ main index.

NVIDIA’s 4H chart

We suggest opening a short position on July 20^th. The first target is a 100-period moving average with the price at $700. If the price breaks this support level, it will head towards $620, which is about the 200-period moving average.  As it is seen on a chart, during every correction price reaches this support line.

FBS Analyst Team