Nvidia Corporation NVDA opened slightly lower on Wednesday but started rising intraday. The move continues a bullish trading session on Tuesday that saw the chipmaker rebound more than 5%.
Although the global semiconductor shortage, which took many chipmakers to all-time highs last year, is far from over, Nvidia and other companies like Advanced Micro Devices, Inc. AMD who manufacture chips through third parties should not benefit from the CHIPS Act, which cleared its first hurdle on Tuesday.
While Nvidia and AMD design chips in-house, they rely on foreign companies to produce the technology, such as Taiwan Semiconductor Mfg. Co.Ltd TSM. The CHIPS Act, which aims to benefit domestic semiconductor manufacturers by providing benefits such as tax incentives, strongly favors companies such as intel company INTC but could eventually force companies like Nvidia to find ways to bring manufacturing operations to the US
Despite the news, Nvidia fared more bullish than Intel on Wednesday, as the former continued its uptrend northward. For comparison, Nvidia is up 23% over the past 12 trading days, while Intel is up 12% over the same period.
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The Nvidia chart: Nvidia reversed its upward trend on July 5 after bouncing off the $140.55 mark. The most recent high in the trend was printed on July 8 and $160.37 and the most recent low was formed at the $144.65 level on July 13. On Wednesday, Nvidia was charging higher and showing no signal that its next high could be in .
- For technical traders, the move higher was the most likely scenario as on Tuesday Nvidia printed a bullish candlestick and closed near its daily high. If Nvidia closes Wednesday’s session at the day’s high, higher prices should return on Thursday, although a possible pullback, at least to form another higher low, is needed.
- As the stock rises, Nvidia may find resistance at the upper falling trendline of a declining channel, in which the stock began trading on May 4. If that happens, Nvidia may need to consolidate below the trendline for a while before eventually breaking out. above, which could signal a larger reversal to the upside.
- Bears will want to see Nvidia reject the upper trendline and then big bearish volume comes in and pushes the stock back below the 8-day and 21-day exponential moving averages, which could indicate that a longer bearish period is looming. on the horizon.
- Nvidia has upper resistance at $180.73 and $187.80 and lower support at $161.37 and $145.75.
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Photo courtesy of Nvidia.