Watch These Nvidia Stock Price Levels as AI Chip Giant Hits $4 Trillion Market Value

Nvidia (NVDA) shares hit a record high Wednesday as the AI investor favorite became the first company ever to reach a market capitalization of $4 trillion.

Nvidia shares have risen 88% from their early-April low and are up 20% since the start of the year, boosted by expectations that major technology companies will continue snapping up the chip giant’s products as they build out their AI capabilities. Nvidia shares closed Wednesday’s session nearly 2% higher at around $163, leaving the market value just shy of the milestone level it briefly surpassed early in the day.

Below, we break down the technicals on Nvidia’s weekly chart and identify price levels that investors will likely be watching.

Strong Uptrend Remains Intact

Since forming a bullish engulfing pattern in early April, Nvidia shares have trended sharply higher, with the price climbing back above the 50-week moving average (MA) in May on its way toward its recent highs.

Moreover, the relative strength index confirms bullish momentum, but remains below overbought levels, indicating the shares have more room to test higher prices before consolidating.

However, it’s worth pointing out that trading volume has steadily declined during the stock’s move higher in recent months, suggesting that larger market participants may remain on the sidelines.

Let’s apply technical analysis to Nvidia’s chart to forecast how a longer-term uptrend in the stock may play out and also identify key support levels worth watching during potential retracements.

Bars Pattern Analysis

Investors can forecast where Nvidia shares may be headed next by applying bars pattern analysis, a tool that analyzes prior trends to project how a future directional move may take shape.

When applying the analysis to Nvidia’s chart, we extract the price bars comprising the strong trending period from January to August 2023 and overlay them from the stock’s recent close above the 50-week MA. This projects an upside target of around $300 and indicates the move higher could last until late December this year if a similar trend emerges.

We selected this prior trend as it also followed a bullish close above the 50-week SMA and has closely replicated the stock’s current price action in recent weeks.

Key Support Levels Worth Watching

During pullbacks in the stock, it’s initially worth watching the $130 level. The shares could find support in this area near the upward sloping 50-week MA and a trendline that connects a series of corresponding trading activity on the chart stretching back to June last year.

Finally, the bulls’ failure to successfully defend this level could see Nvidia shares fall to lower support around $97. Investors may look for buying opportunities in this region near the prominent March 2024 swing high, which sit just above major lows that formed on the chart in August latter that year and April this year.

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As of the date this article was written, the author does not own any of the above securities.