NVDA May Surge to $170 in Q1 After Crossing $145 Amid Rising Trader Optimism

Nvidia Corporation (NVDA) has recently closed above the $140 mark for the first time in 20 days. This surge has drawn the attention of traders who are optimistic about the stock’s future performance, especially if it breaches the significant level of $145 per share.

What’s Happening: The rise in Nvidia’s stock price above its 50-day simple moving average has sparked bullish sentiment among traders. On a shortened trading session, Nvidia's shares moved past the $140 threshold, marking a notable shift since December 6. According to quant trader Peter DiCarlo, if the stock continues its upward momentum and exceeds $145 per share, it could potentially reach as high as $170 by the end of the first quarter.

However, DiCarlo also cautioned that if this rise is a false signal (or trap), there could be a pullback to $120, which would establish a confirmed bottom before any upward movement towards $170 in the second quarter.

To confirm this upward trend, Nvidia must successfully break through the $145 level. If this happens, a climb to $170 in Q1 is on the horizon. Conversely, a rejection might see shares decline to $120.

A chart analysis shared by The Rock Trading Group's founder highlighted that breaching the $141.87 price level is crucial for Nvidia to approach the $145 trendline.

Steven Strazza, the director of research at All Star Charts, also reiterated this sentiment. He reported that momentum indicators do not show the stock is oversold. Strazza noted that the semiconductor sector is gaining traction and that the “magnificent seven” stocks are achieving new all-time highs. He emphasized that Nvidia displays a clean support level, suggesting that this is not the peak for the stock.

According to technical indicators, Nvidia’s stock is currently exhibiting a strong bullish trend. It ended Tuesday at $140.22, surpassing both its eight-day and 20-day simple moving averages of $133.85 and $137.17, respectively, as well as its 50-day moving average of $139.76 and its 200-day average of $116.91.

The relative strength index stands at 54.12, indicating that while the stock has a moderately strong movement, it is not yet in an overbought territory.

Why This Matters: Market analyst Jim Cramer recently warned of a potential correction for Nvidia, mentioning a quick reversal might occur if the stock surges too quickly without proper momentum. This caution follows Nvidia facing an ongoing antitrust investigation in China linked to its 2020 acquisition of Mellanox Technologies.

Analyst Ming-Chi Kuo expects the investigation to linger, closely mirroring Qualcomm's prolonged antitrust case in China.

Price Action: Nvidia's shares have seen an uptick of 4.84% in the past five days and have impressively risen 191.09% year-to-date, outpacing the Nasdaq 100, which has experienced a decline of 0.83% over the same period and has gained 31.67% throughout the year.

As per recent ratings from 40 analysts, Nvidia has a consensus price target of $170.56. Notably, the highest target set by Rosenblatt stands at $220 as of November 21, while the lowest target is $120 from New Street Research issued on August 6.

The average target price of $154.67 from DA Davidson, Phillip Securities, and Truist Securities suggests a potential upside of 10.67% for Nvidia.

Nvidia, Stocks, Market