NVIDIA NVDA Crashes Through Bearish Wedge to Daily Target

Aug 11, 2017: 12:23 PM CST

Bullishly trending NVIDIA (NVDA) just broke a bearish rising wedge on negative divergences, collapsing instantly to a daily chart support target.

What’s up next for the stock and is there a trade in it?  Let’s check:

NVIDIA NVDA Bearish Rising Wedge Breakout

NVIDIA repeatedly showed up on our “Strong Stocks Getting Stronger” scan, but the recent negative momentum and volume divergences into $170 gave us pause.

Our caution increased when a Bearish Rising Wedge pattern developed as highlighted.

Yesterday and now today with a big bearish down gap on high volume, NVIDIA shares collapsed to the rising 50 day EMA at the $155 per share level, a downside sell-swing target.

Keep the Daily Chart in mind as you step down to the Intraday Chart to highlight the Wedge:

NVIDIA NVDA Bearish Rising Wedge

This is a textbook pattern of higher timeframe divergences with a lower timeframe bearish (potential) reversal pattern.

Yesterday saw an initial breakdown beneath the $167 lower (rising) trendline, triggering initial stop-losses (from bulls) and drawing aggressive sell-short trigger-entries from bears.

The bears were rewarded and eager bulls were punished with a gap-down to the target.

From here, focus on the immediate departure “away from” the $155 level which is taking the form of an intraday reversal at the moment.

Frame your trade on the Daily Chart, playing a breakdown under support (hasn’t happened yet) or the continued short-term bullish bounce (happening this afternoon).

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Corey Rosenbloom, CMT

Afraid to Trade.com

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