Nvidia Slips 0.52% As Technical Indicators Signal Overbought Risks

Nvidia (NVDA) closed at $164.07 in the latest session, declining 0.52% amid moderate trading volume. The following technical analysis synthesizes key indicators to assess the stock’s trajectory.
Candlestick Theory
Recent price action reveals a consolidation phase near the $162–$165 range. The July 14 session formed a small bearish candle following two indecisive dojis, signaling hesitation after a rally from the $158 support (tested July 8). Resistance is evident at $165.49 (July 14 high), while the $162–$161 zone (June 23–24 lows and July 9 close) now acts as a critical support confluence. A break below $162 could trigger further downside toward $158.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages (MAs) align bullishly, with shorter MAs above longer ones. Current price ($164.07) trades above all three MAs, affirming the uptrend. The 50-day MA near $148 (derived from mid-June troughs) offers dynamic support. However, the widening gap between the 50-day and 200-day MAs suggests extended valuations, increasing vulnerability to pullbacks if sentiment shifts.
MACD & KDJ Indicators
MACD shows a bullish crossover (signal line under MACD line) but with diminishing histogram momentum since late June, indicating slowing upside thrust. KDJ’s %K (82) and %D (79) hover near overbought territory (>80), echoing fatigue after the Q2 rally. While no bearish crossover is present, stretched KDJ levels historically precede consolidations. Divergence appears as price hit higher highs in July while MACD momentum plateaued, warning of potential reversal risk.
Bollinger Bands
Bands contracted sharply in early July (volatility squeeze) before expanding upward as prices rallied to $167.89 (July 11). The current price hugs the upper band, typical of strong trends but also implying overextension. A retreat toward the 20-day SMA (mid-band near $155) may realign prices with mean-reversion dynamics. Narrowing bands would signal reduced volatility and possible directional shift.
Volume-Price Relationship
Volume surged during key upswings (e.g., +4.33% on June 25, +8.93% on January 28), validating bullish momentum. Conversely, the July 14 decline occurred on below-average volume, suggesting limited conviction. However, diminishing volume during recent highs ($165–$167) implies weakening buyer enthusiasm, raising sustainability concerns for further gains.
Relative Strength Index (RSI)
The 14-day RSI reads 65, retreating from overbought territory (71 in early July) but holding above neutrality. While not oversold, the exit from >70 levels aligns with the stock’s consolidation. RSI’s failure to breach 70 during July’s rally signals negative divergence, reinforcing the need for caution. Historical reversions from RSI >70 often see pullbacks to the 45–50 zone.
Fibonacci Retracement
Applying Fib levels to the uptrend from the April 21 low ($96.91) to the July 11 high ($167.89): Key retracement supports emerge at $154.43 (23.6%), $147.66 (38.2%), and $143.30 (50%). The 23.6% level coincides with the June 25 breakout and 50-day MA, creating a high-probability support zone. A breakdown below $154.43 could extend toward $147.66.
Confluence and Divergence
Confluence exists at $154–$155 (50-day MA, Fib 23.6%, and volume-supported breakout area), making it a critical defense for bulls. However, multiple indicators reveal divergences: MACD/RSI momentum waned as prices climbed, KDJ neared overbought, and volume faded near highs. This collective divergence suggests consolidation or a moderate correction is increasingly probable. While the primary trend remains bullish, short-term risks lean toward a pullback toward $155–$158 before resuming upside. Traders should monitor the $162 support and $165 resistance for breakout/breakdown signals.
(Calculations based on OHLCV data from 2024-07-15 to 2025-07-14; indicators derived from standard formulas and price patterns.)