Watch These Nvidia Stock Price Levels With Earnings Report Set for Release Wednesday

Nvidia (NVDA) shares will be on watchlists as the AI favorite gears up to release its highly anticipated earnings report after Wednesday’s closing bell.

The chipmaking giant, which has a track record of blowing past Wall Street expectations amid insatiable demand for its lineup of AI silicon, is projected to report a 73% jump in fourth-quarter revenue from a year earlier and post net income of $21.08 billion, up from $12.84 billion.

Nvidia shares trade flat on the year, but have gained 12% this month as of Friday’s close, with analysts remaining widely bullish on the chipmaker’s stock as big tech hyperscalers continue to ramp up spending on AI infrastructure. The stock fell 4.1% to $134.43 on Friday amid a broader sell-off on Wall Street.

Below, we take a closer look at Nvidia’s chart and use technical analysis to identify crucial price levels worth watching out.

Shares Trade in Descending Channel

Nvidia shares have consolidated in a descending channel since mid-December, with trading volumes declining over that period.

More recently, a bearish engulfing pattern formed on the chart Friday, signaling a potential move lower ahead of the chipmaker’s results. Interestingly, this same candlestick pattern has appeared on two other occasions since the stock set its record high in early January, both of which preceded further selling.

Meanwhile, the relative strength index (RSI) has mimicked the price, putting in lower highs since the start of the descending channel, indicating waning buying momentum.

Let’s identify several crucial support and resistance levels on Nvidia’s chart that investors may be watching.

Crucial Support Levels to Watch

The first lower level to eye sits around $130. The shares could find support in this area near a trendline that links the prominent August peak with troughs that formed on the chart in December and January.

Selling below this location may see the shares decline to the $113 level. Investors may look for buying opportunities in this region near this month’s swing low, which closely aligns with a range of comparable trading levels on the chart stretching back to May last year. This area also lies just above a projected bars pattern target that takes the stock’s move lower in late January and repositions it from the descending channel’s top trendline.

A more significant post-earnings drop in Nvidia shares could bring the $102 level into play, a location on the chart where the shares may encounter support near the opening price of the late May breakaway gap and a series of prices situated around the August and September lows.

Key Resistance Levels to Monitor

A breakout above the descending channel’s upper trendline could initially see the shares make another attempt at the $153 level. This area on the chart would likely provide overhead resistance near the stock’s all-time high (ATH).

Finally, investors can forecast a bullish target above the ATH by using the measured move technique, also known as the measuring principle.

To apply the analysis, we calculate the wide of the descending channel in points and add that amount to the pattern’s top trendline. For example, we add $32 to $142, which forecasts a target of $174, a location nearly 30% above Friday’s closing price where investors may decide to lock in profits.

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