Technology growth stocks have been battered hard since the year began. NVIDIA Corporation (NASDAQ:NVDA) was not spared in the market downturn. The recent weeks, however, were more difficult for the technology stock as markets turned cold on news of war in Ukraine. Adding to the geopolitical risk facing the market in general are the key concerns about sanctions placed on Russia, especially on access to technologies. The market is concerned that sanctions will hurt the revenues of technology stocks; hence the prices are trending downwards.
NVIDIA’s developing bearish momentum
Source – TradingView
NVIDIA shares traded at $220.17 when this analysis was conducted. At this level, the share price was at par with the 50-day moving average. With the intraday loss of 4.29% at the time, it was clear that the market price was likely to drop below the 50-day moving average, affirming the continuation of a downward trend.
Momentum analysis using the RSI and MACD oscillators indicates that NVIDIA is on a certain bearish momentum. The RSI was at 41.89 and dropping. Though the MACD was above 0 by only 0.28, almost certain that it would close below 0. The MACD histogram shows a divergence of -9.46, confirming that the share is a strong sell. The issue of concern then is how low the share could go. Analysis shows that NVIDIA could find support around $200 which is a very significant level.
Summary
NVIDIA faces higher-than-market risk due to sanctions placed on Russia’s access to technologies. The share price has been trending downwards, with the bearing trend projected to persist. Investors should consider selling the stock or wait for it to settle at lower levels before scooping a buy.
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