NVIDIA (NVDA) Analysis: Bearish Outlook with Potential Completion of B-Wave Rally
The current structure for NVIDIA (NVDA) suggests a continuation of the corrective phase within a broader Wave 4. The chart indicates that the recent upward movement is likely part of a larger B-wave rally within this correction. This B-wave appears to be nearing completion, with Wave C of the B-wave approaching a critical resistance area.
Chart Observations and Structure
B-Wave and Channel Formation:
- The upward movement in NVDA has formed a clean channel, currently in Wave C of the B-wave. The structure of this rally is three-part, indicating a corrective, rather than impulsive, upward movement, which is characteristic of a B-wave.
- The current price level is approaching the upper boundary of this channel, with Wave C likely in its final stages (Wave 5 of C). Based on the structure, this upward move has limited momentum, consistent with weaker fifth waves that often lose strength near the end.
Target Zone for Wave C Completion:
- The target zone for this Wave C of the B-wave is around $157, where key Fibonacci retracement levels (including the 0.618 level) align with resistance. This level serves as an approximate target, though the weakening momentum suggests that the fifth wave may not fully reach this zone and could reverse before completion.
Potential Downside and Support Levels:
- After completing Wave C of the B-wave, we expect NVDA to enter Wave 4’s final corrective leg, which would likely bring the price back down to key support zones. Support areas are marked around previous lows and Fibonacci retracement levels, notably at $92 and $77.
- This next downward move would likely break the upward channel and re-enter the broader support range, potentially preparing NVDA for a more sustained upward trend following the correction.
Summary and Outlook
- Bearish Setup: NVDA’s current upward move is part of a B-wave rally within a larger Wave 4 correction, likely nearing completion around $157.
- Channel Resistance: The ongoing rally within the channel is losing momentum, characteristic of a final fifth wave in Wave C, which increases the likelihood of a reversal soon.
- Target and Support Zones: The target for Wave C is around $157, but the correction may resume before reaching this level. Expected support zones for the next downward move are around $92 and $77.
In conclusion, NVIDIA remains in a bearish setup within its Wave 4 correction. The current rally appears to be nearing its peak, after which we anticipate a downward movement to complete the corrective phase. Monitoring momentum and any signs of reversal near $157 will be crucial for confirming the end of this B-wave rally.