NVIDIA's Technical Breakout and Fed Pivot: A Recipe for Continued Momentum?

The Federal Reserve's June 2025 decision to hold rates at 4.25%–4.50% while signaling potential cuts later this year has ignited optimism across markets, particularly for technology stocks like NVIDIA (NVDA). Pre-market trading on June 19 saw NVDA surge 2.9%, driven by a confluence of technical momentum and macroeconomic catalysts tied to the Fed's “wait-and-see” stance. This article analyzes how NVIDIA's chart patterns, macro tailwinds, and AI-driven fundamentals could sustain the rally—or trigger a correction.

The Fed's Pivot and NVIDIA's Bullish Backdrop

The Fed's statement emphasized patience but left the door open for two rate cuts by year-end, aligning with market expectations. This pivot is critical for NVIDIA, as lower rates reduce the opportunity cost of holding high-growth equities like NVDA, which derives 73% year-over-year revenue growth in its data-center business from AI infrastructure demand.

Key macro drivers for NVDA's rally:
1. AI Revenue Surge: NVIDIA's Q2 2025 earnings highlighted record data-center sales, fueled by demand for its H100 and H800 GPUs in AI training and inference. This growth is expected to accelerate as global enterprises invest in generative AI.
2. Fed Rate Cut Expectations: The CME FedWatch Tool assigns a 78% probability of at least one cut by September 2025, reducing pressure on tech stocks sensitive to rising rates.
3. Geopolitical Tailwinds: While U.S.-China trade tensions remain a risk, recent diplomatic overtures—such as the Saudi AI deal—suggest easing barriers to NVIDIA's access to global markets.

Technical Breakout: NVDA's Chart Patterns Signal a New Bull Run

NVDA's technical setup on June 19, 2025, is bullish, with price action validating key resistance levels and moving averages:

• Resistance Break:
• NVIDIA breached the $143–$144 resistance zone (a historic supply area from February 2025) on June 19, closing at $154.31—a new all-time high. This突破 signals a shift from consolidation to a sustained uptrend.

• The next targets are $150 (a psychological level and prior peak) and $175, with potential for a run to $200 if the upward momentum holds.

• Golden Cross Confirmation:

• The 50-day moving average (MA) crossed above the 200-day MA on June 18, forming a Golden Cross, a classic bullish signal. This crossover aligns with the Fed's dovish pivot, suggesting a multi-month rally could be underway.

• Support Levels:

• The $121–$130 zone (near the 50-day MA) is critical support. A close below $121 would invalidate the bullish case, but as of June 19, price action remains robust.

Sustainability of the Rally: Fundamentals vs. Overbought Risks

While the technicals and macro backdrop are bullish, investors must assess whether AI-driven fundamentals can justify the valuation climb.

Bullish Case:
- NVIDIA's AI dominance is unmatched. Its software ecosystem (e.g., CUDA, Omniverse) and partnerships with cloud giants like Microsoft and Amazon lock in recurring revenue streams.
- Loop Capital's $250 price target (a 60% upside from June 19's price) reflects confidence in AI's long-term growth trajectory.

Bearish Risks:
- Overbought Conditions: NVDA's 14-day RSI hit 72 on June 19—deeply overbought—raising the risk of a pullback to retest $143.
- Fed Policy Volatility: While rate cuts are anticipated, geopolitical risks (e.g., Israel-Iran tensions) or an inflation spike could force the Fed to delay easing, pressuring equities.

Actionable Insights: Entry Points and Risk Management

1. Buy on Dips:

2. Aggressive investors could enter at $143–$144, aiming for $150–$175 targets. A stop loss below $130 mitigates downside risk.

3. Wait for Confirmation:

4. Conservative investors should wait for a sustained close above $150 before committing. This would confirm the breakdown of resistance and reduce false breakout risks.

5. Monitor the Fed and Inflation:

6. The July FOMC meeting and August inflation data will be critical. A dovish tilt or cooling inflation could extend the rally; a hawkish surprise could trigger a drop to $121.

7. Leverage Options:

8. Consider bullish call options (e.g., $150 strike price) to profit from volatility while limiting downside exposure.

Conclusion: A Golden Cross and AI Gold Rush

NVIDIA's technical breakout and the Fed's pivot have created a compelling setup for investors. The Golden Cross and resistance breach suggest a multi-month rally, while AI's structural growth provides a tailwind. However, overbought conditions and macro uncertainty demand caution.

Final Recommendation:
- Aggressive Traders: Enter at $143–$144 with a stop below $130.
- Conservative Investors: Wait for a $150 close before scaling in.
- All Investors: Monitor the Fed's next moves and inflation data closely—these will determine whether this rally is a fleeting spike or the start of a new bull market.

As NVIDIA's GPUs power AI's future, its stock may finally be pricing in the full potential of this transformation.