With the news of Jensen Huang’s departure and Nvidia’s leadership transition now out, the focus for traders shifts to the next question: What happens from here?
In the video above, I look at that question from a technical perspective. What levels matter for buyers and sellers? Why do they matter? And what does the price need to do to signal a rebound or open the door for more selling?
Traders need to remember that news changes all the time. We never know every development that will influence the price. My guess is that very few traders had Huang resigning as CEO and a board member on their bingo card—or included that possibility in their risk assessment. But it happened.
That uncertainty is why I focus on price action and technical tools. We cannot anticipate every headline, but we can identify when the price breaks a key level and use that break to define our bias and risk.
For Nvidia, the move below its 200 day moving average, currently at $204.31, was an important technical warning. Staying below that level strengthened the bearish bias, and the last three trading days have brought additional selling pressure. The full story was still unfolding, but the price was already moving lower.
Now that the leadership announcement is public, some traders may see an opportunity to buy the dip. However, a lower price alone does not define a trade. Buyers still need to ask: Where am I wrong? What support am I leaning against? And what resistance must the price reclaim to show that buyers are taking back control?
Those are the questions I address in the video above. The technical levels provide a roadmap for both sides of the market. They help define where a rebound can gain traction, where sellers may lean against resistance, and where another break could trigger more downside momentum.
The news provides the catalyst. The price action helps define the bias, the risk and the next targets.
This article was written by Greg Michalowski at investinglive.com.