Nvidia's Pre-Market Surge and Key Support Levels

Nvidia shares witnessed a notable upward movement in premarket trading on Thursday. This came after the AI investor favorite disclosed its quarterly results and an outlook that exceeded the expectations of Wall Street. The company's closely monitored data center revenue witnessed a remarkable doubling in the fiscal third quarter, driven by the substantial spending on AI infrastructure by large technology firms. Executives during the post-earnings conference call emphasized the enormous demand for the chipmaker's next-generation Blackwell system and their efforts to enhance supply, positioning Blackwell revenue on a trajectory to surpass estimates.

Unlock Nvidia's Post-Earnings Potential with Key Support Levels

Volumes Light After Ascending Triangle Breakout

Nvidia shares had been trading within a four-month ascending triangle until breaking out above this chart pattern last month. Since then, the stock's price has been on an upward trajectory, with the 50-period moving average serving as a support level. It is noteworthy that trading volumes have remained relatively light following the breakout, indicating that larger market players might have been on the sidelines awaiting the chipmaker's quarterly report. This situation presents an interesting dynamic as the market awaits further cues on the stock's future direction.

As the stock continues to move higher, investors are closely observing these volume patterns and their implications for the overall market sentiment. The light trading volumes could potentially lead to more volatile price movements in the coming days as market participants assess the newfound strength and potential risks.

Looking ahead, it will be crucial to monitor how these volume trends evolve and whether they provide any early signals about the sustainability of Nvidia's upward momentum.

Important Support Levels to Watch

During earnings-related weakness, investors need to keep a close eye on the $136 level. This area near the ascending triangle's top trendline could act as a crucial support zone. It is a region where the chart pattern may transition from prior resistance to future support, offering a potential buying opportunity for investors.

If the stock were to break down below this level, it could see a decline towards around $115. This is a region where the stock may attract buying interest near a trendline that connects a range of comparable trading levels on the chart between May and October. Such a level could act as a significant support floor and potentially trigger a buying bounce.

Further selling in the stock might bring the key $97 area into play. Investors could look for buying opportunities at this level near two peaks that formed on the chart in March and are closely aligned with prices positioned around the early-August sell-off low. This level holds potential as a support level that could attract bargain hunters and stabilize the stock's price.

Measured Move Price Target

Investors can utilize the measured move technique to project a chart-based price target for Nvidia. By calculating the distance between the ascending triangle's two trendlines at their widest point and adding that amount to the pattern's top trendline, we can forecast a target. In this case, adding $50 to $136 gives us a target of $186, which is approximately 27% above Wednesday's closing price. This area could potentially be a point where investors choose to take profits, but it also represents an important milestone in the stock's upward trajectory.

The measured move price target provides a useful tool for investors to assess the potential upside of the stock and make informed decisions about their investment positions. However, it is important to note that market conditions and other factors can influence the actual price movement and the achievement of this target.

As Nvidia continues to dominate the AI chip market and face insatiable demand for its silicon, these key support levels and the measured move price target will play a crucial role in guiding investors' strategies and expectations. Monitoring these levels closely will be essential in navigating the stock's future price movements.