NVDA Retreat Deepens: Earnings Test Looms as 181-189 Range Signals Volatility
$NVIDIA(NVDA)$ closed at $186.60 (-1.88%), down from Friday's $190.17, extending its decline to 12.1% from the recent peak of $212.19, signaling continued weakness ahead of crucial earnings.
Core Market Drivers: Institutional repositioning intensifies as major funds including Bridgewater (-65.3%) and Peter Thiel's fund (complete exit) drastically reduced NVDA holdings in Q3; Meanwhile, AI bubble concerns mount as short interest reached 8.14% of float, reflecting growing skepticism about AI trade sustainability.
Technical Indicator Analysis: Trading volume of 174M shares remained below average with volume ratio at 0.94, indicating lackluster buying interest; RSI likely hovering around oversold territory suggests potential bounce, but MACD bearish momentum persists as stock struggles below key moving averages.
Key Price Levels Watch:
Critical Support Zone: $181.82 — Previous support level that could provide temporary relief if tested
Strong Resistance Band: $186.82-$189.00 — Immediate overhead pressure from today's high and psychological resistance
Breakout Level: $195-$200 — Reclaim needed to shift sentiment and target $210+ zone
Valuation Analysis: $NVIDIA(NVDA)$ 's current P/E TTM of 53.2x significantly exceeds S&P 500's ~21x multiple; Forward P/E of 42.0x remains elevated versus historical average of 43.1x, suggesting limited valuation cushion despite recent pullback.
Analyst Price Targets: Wall Street consensus maintains $234.40 average target (54 analysts), with range from $138-$390; 22 strong buys and 37 buy ratings support medium-term optimism, though recent institutional selling suggests caution.
Weekly Outlook: Expect heightened volatility around Wednesday's earnings release; Stock likely to trade within $175-$195 range unless earnings provide significant surprise; Break below $175 could trigger deeper correction toward $160-$165 support, while earnings beat above consensus might propel stock back toward $200+ resistance.
Risk Disclaimer: This analysis is for informational purposes only and does not constitute investment advice; NVDA remains subject to earnings results, AI demand cycles, and broader market sentiment shifts that could materially impact price action.
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