Nvidia Drops 2.33% To $173.72 As Bearish Signals Mount After All-Time High

Nvidia (NVDA) concluded the most recent trading session at $173.72, marking a 2.33% decline and extending its losing streak to two consecutive days with a cumulative 3.10% drop. This retreat follows a peak of $183.30 on July 31st, positioning the stock at a critical technical juncture. The subsequent analysis evaluates key indicators across multiple methodologies to assess probable price trajectory and potential reversal zones.
Candlestick Theory
Recent candlestick patterns reveal significant bearish signals. The July 31st session formed a long-upper-shadow candle (high: $183.30, close: $177.87), indicating rejection near all-time highs, followed by two solid bearish candles on July 31st and August 1st—a Two Black Crows pattern. This suggests waning bullish momentum at the $183 resistance level. Immediate support lies at $170.89 (August 1st low), with a breach potentially targeting the $167.03–$164.58 consolidation zone from mid-July. Resistance is firmly established at $176.54–$183.30, where repeated failure signals distribution.
Moving Average Theory
The 50-day moving average (MA) near $162 sustains above the 100-day MA (~$147) and 200-day MA (~$130), confirming a long-term bullish structure. However, the recent close at $173.72 is testing the 20-day MA ($174.50) as immediate resistance. A sustained break below this dynamic support could accelerate selling toward the 50-day MA. The convergence of shorter-term MAs flattening near $175 suggests short-term trend indecision. The primary uptrend remains intact, but a death cross between the 5-day and 20-day MAs may signal near-term bearish pressure.
MACD & KDJ Indicators
The MACD (12,26,9) has crossed below its signal line into negative territory, reflecting building bearish momentum. Concurrently, the KDJ oscillator (9,3,3) shows the %K line (28) and %D line (35) plunging toward oversold thresholds. While not yet oversold (below 20), this alignment indicates accelerating downside momentum. Divergence emerged on July 31st when price hit $183.30 while KDJ peaked lower than its prior high—a warning of weakening upward thrust. These oscillators collectively favor further downside before basing.
Bollinger Bands
Bollinger Bands (20-day SMA, 2σ) expanded sharply during the rally to $183.30 (July 31st), highlighting volatility surge. The subsequent rejection pressed price from the upper band toward the midline (~$174), with the August 1st close hovering near this level. Band contraction often precedes directional breaks; current tightening suggests potential volatility expansion. Failure to hold the midline may trigger a test of the lower band near $164, aligning with the Fibonacci 61.8% retracement level.
Volume-Price Relationship
Volume analysis reveals bearish confirmation. Down days on July 31st (221.7M shares) and August 1st (204.5M shares) exceeded the 30-day average volume, signaling conviction behind the sell-off. Conversely, the July rally to $183.30 lacked commensurate volume spikes, indicating weak participation. Accumulation-distribution patterns now show distribution dominance, undermining sustainability of rebounds without volume-backed recovery.
Relative Strength Index (RSI)
The 14-day RSI at 42 has retreated from overbought territory (>70) but remains above oversold levels (<30), implying room for further downside. Notably, RSI peaked at 78 near $183.30 yet formed a lower high relative to the July peak—a bearish divergence reinforcing exhaustion. Historically, RSI readings near 35–40 have triggered bounces during the uptrend; a breach could expose the 30 support threshold, where oversold conditions may attract buyers, albeit amid elevated volatility.
Fibonacci Retracement
Using the swing low of $164.58 (July 22nd) and high of $183.30 (July 31st), key Fibonacci levels are mapped. The 38.2% retracement ($176.15) was breached decisively, while the 50% level ($173.94) coincides with August 1st’s close at $173.72. Confluence exists here as candlestick support and the 20-day MA converge. A sustained break below $173.72 targets the 61.8% retracement ($171.73) and July’s pivot low ($164.58). Bullish reversals require reclaiming $176.15 to invalidate the breakdown scenario.
Confluence and Divergence
Confluence reinforces $173.72–$174 as pivotal, merging the 50% Fibonacci level, 20-day MA, and candlestick support. Multiple breakdown signals (MACD/KDJ crossovers, Two Black Crows, volume-backed decline) validate resistance at $176.54–$177.87. A critical divergence exists between price highs and RSI/volume, supporting bearish momentum. Should the 61.8% Fib level ($171.73) hold alongside oversold KDJ/RSI readings, a technical bounce may materialize. However, volatility expansion signaled by Bollinger Bands favors testing lower supports near $168–$165, where the 100-day MA and July’s accumulation zone may stabilize the trend.