$NVDA – Monthly Analysis
All I can say is, “Wow.”
The monthly level I warned about at the beginning of May came down to the wire, and Nvidia closed just 20 basis points below it. That makes this monthly close especially important and gives us a clear reason to reassess how the event changes the technical picture and the path ahead.
In today’s monthly analysis, 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 and TA
One does not see this often. Thursday’s full Bullish Engulfing, which typically carries about 90% odds of continuation higher, was completely negated by an even larger Bearish Engulfing on Friday.
The move was especially damaging because it happened on the final day of both the week and the month. As a result, the weekly frame now has a confirmed Dark Cloud Cover, while the monthly closed just 20 basis points below the November high, leaving the November Bearish Engulfing in control.
A heck of a move, I would say.
Now, NVDA is facing a potential repeat of the November move, which would imply a decline of about 20% from the current price near $211. If the stock closes June or July below the November low, it would form a very sizeable Double Top. But let’s not jump the gun yet.
Nvidia starts June as strongly bearish until reversed.
Correction
NVDA completed the first downward move as expected at the $208 level and bounced strongly. Unfortunately, the bounce was not able to form an impulse, so we have to cancel the immediate plan for a new higher high.
Instead, we are now looking at two most probable bearish paths. The red path implies that the triangle in the middle of May was wave B, and Nvidia has now started wave 3 of a sizeable 1–5 impulse for wave C. The blue path is more moderate: Thursday’s bounce was either wave a of a larger B, or the entire wave B.
A 15–25% drawdown looks reasonable for completing either of these structures.
The long-term chart we discussed in the middle of May remains intact, and it has been reinforced by the 10D Bearish Engulfing. What a difference one day can make.
SUMMARY
Nvidia has moved into a bearish setup after failing to sustain the bounce from the $208 target area. The stock’s short-term recovery was not strong enough to restore the bullish path, and the broader technical structure now points to elevated downside risk.
This matters well beyond NVDA itself. With Nvidia representing roughly 9% of both Nasdaq and the S&P 500, and with SOX already technically overheated, a bearish setup in the market’s flagship AI stock is unlikely to be ignored by market participants. If Nvidia continues to weaken, it could pressure Nasdaq, SPX, semiconductors, and the broader AI trade.
