$NVDA – Weekly Update

As warned, NVDA is moving lower and has already lost about 9%. The key question now is whether this is merely a healthy pullback after an extreme rally, or the beginning of a more important trend change.

In today’s quick update, we take a closer look at Nvidia, the largest pillar of both the S&P 500 and Nasdaq, with a representation of roughly 9% in each index. We assess the latest technical developments, break down the critical signals, examine the evolving structure, and outline the most probable paths forward for one of the market’s most influential stocks.

Candles

Following a major technical stretch, NVDA formed bearish candles on both the daily and weekly frames. However, the signals were not as technically strong as they could have been, so the weekly setup still requires firm confirmation.

Next week becomes pivotal for Nvidia on both the weekly and monthly frames. A close below the November high would likely be very bearish for the stock and could signal either a prolonged decline or a broader rangebound correction. At the same time, NVDA is oversold on several smaller frames, which could still trigger at least a short-term bounce.

The main question is timing — specifically, how any bounce or renewed weakness aligns with the month-end close.

Overall, the short-term outlook remains bearish. The mid- and long-term outlooks will likely be decided next Friday.

Flag -> Expanding Triangle

An interesting transformation occurred in Nvidia around the earnings report and the session that followed. Unless I am deeply mistaken, the stock formed a very rare expanding triangle, visible only on the extended-hours charts. This formation adds a measure of optimism to the current path.

According to Elliott Wave guidelines, triangles almost always appear immediately before the final actionary wave of one larger-degree pattern, most often as wave four within an impulse or wave B within an A-B-C correction. In simpler terms, there is a strong chance that the current wave, with its already defined target area, represents the final wave of Nvidia’s correction.

This is the primary hypothesis for now. However, if the stock does not find support in the target area and instead continues lower, especially with a break below the May low, the correction could become far more serious.