Nvidia's $150B buyback fails to keep chip stocks buoyant

NVIDIA (NVDA) is currently trading at $230.19, marking a 2.27% gain as of 2:23 PM EDT. This price level corresponds to a significant resistance zone that has been a focal point for traders over the past few weeks. Analysts have identified this zone between $229 and $230 as a critical point, as it halted the previous rally. Above this zone lies the September high near $235–236, which could serve as the next target if the current resistance is overcome.

At this juncture, the price is situated within the $230 resistance band, but it has not yet broken out. The 52-week high of $236.54 remains the ultimate structural ceiling for NVDA. For a convincing daily close above $230, NVDA would need to reopen the path to $234–236, signaling a potential breakout. On the other hand, if the price stalls at this level, it could reinforce the resistance as supply, resulting in a hesitant move rather than a clean breakout.

The multi-timeframe analysis provides mixed signals. The monthly ADX (Average Directional Index) at 40.2 indicates a robust longer-term uptrend, suggesting that the rally is not a false start from the $164 lows. However, the daily and weekly ADX readings are 16–18, both below the 20 threshold, implying a lack of strong trend conviction in the current movement. Additionally, the daily StochRSI (Stochastic Relative Strength Index) is at 100, indicating that buyers may be stretched and potentially overbought.

A potential pullback to the pivot zone of $223–225 (with daily S1 at $223.16 and pivot at $225.05) before another attempt at $230+ would be a more favorable pattern for bulls. The support levels at $219–221 and $212–213 have proven resilient and could provide a buffer if the price were to retreat.

Conversely, the ceiling is supported by three converging signals: the current price at $230, the daily and weekly ADX readings below 20 (indicating a lack of trend energy), and the StochRSI at 100, which signals exhaustion. Analysts have noted that a bullish trigger would occur if NVDA reclaims the $228 price level by the end of the regular session, potentially restoring focus on the $236.54 price record.

In summary, Monday’s 2.27% gain appears to be more of a ceiling test rather than a definitive breakout. A strong close above $230 could swiftly change the dynamics, while failing to do so may push the price back to the $222–225 chop zone previously discussed.