NVDA NVIDIA Weekly Chart; Negative Divergence; Price Extended and Topped-Out

NVIDIA and CEO Emperor Jensen remain the central focus of attention in this new hyped-up artificial intelligence age. There is lots of talk of AI agents. Agent, schmagent. The only agent you need to groove to is the Secret Agent Man with its unmistakable intro riff. Beware those pretty AI faces that you find. Some folks would sing, "Secret Asian Man."

Keystone posted a prior NVDA daily chart showing a H&S pattern in play with neck at 132. Price fell through to126 but quickly recovered on more AI hype news and Jensen waving chips in the air. That general pattern is still in play only now it is a double-headed, Quasimodo, pattern. With head at 153 and neckline at, let's call it 133, where price is at now, 133-136, the downside target is 120 if the 133 fails.

The NVDA weekly chart above is toast, due to the neggie d, and last week started a -6% pullback. The red rising wedge was bearish and all chart indicators were negatively diverged (sloping down while price continued higher), so you knew the top was in, and it was. There was no reason for price to come up again for a matching high since a multi-week slide should take place. NVDA was soft for a couple months but as soon as Jensen was waving more AI chips in the air, traders trip over each other to buy for fear of missing out on this miraculous miracle called AI (arrogant ignorance).

NVDA price comes back up to test the record high and promptly falls on its sword. The dark maroon lines show that the chart indicators remain weak and bleak, and neggie d since price makes a matching high, so another spankdown is expected and occurs last week. The chart is ugly so lots of downside would be expected moving forward.

Watch the RSI and stochastics 50% levels since that will mark a shift from bull territory to bear territory. The 20-wk MA is 132.59, again, highlighting this key support level. Take a purple crayon, Keystone likes purple crayons because they taste like grapes, and draw a thick line across the 132-136 level. If you are bullish NVDA, and price falls below 132-136, that is when you begin losing big chunks of your money on your way to 110-120, and perhaps 80 as the months play out.

Price is extended above the moving average ribbon so a mean reversion lower would be in order. The pink box for the ADX shows that the strong trend higher for NVIDIA is over; it ended in September/October. The Aroon is a hoot. The green line shows that 100% of the bulls, every single NVDA bull, believes that NVDA stock will go up forever. Comically, the red line indicates that about 90% of the NVDA bears also believe that the stock will go up forever. Emperor Jensen is throwing a huge boring party for bulls and bears alike on one side of the boat. Attendees take turns bending knee for Jensen, kissing the ring, and then kissing and bowing to the new AI Blackwell superchip, that appears to be running very warm. Keystone is on the other side of the boat turning up the amps with Story of My Life. Do you want to have fun or lose your money in NVDA?

Take your profits and move on from NVDA. The 110-120 level is likely on tap by the end of the month or early February. The AI company reports yearnings on 2/19/25 so if the stock is soggy until then, that will probably bring it back to life. Note the two purple arrows showing the tight squeeze on the standard deviation bands. A tight squeeze predicts that a huge price move will occur but does not predict direction. In the above example, the tight squeeze shot price to the upside so you knew that would continue in early 2024.

Looking at a monthly chart, it is not pretty. What do you expect for a stock that went from pocket change to 136 bucks in only 9 years? That is impressive and made a lot of people millionaires and Emperor Jensen a billionaire. Alas, all good things come to an end. The chart indicators on the NVDA monthly chart are neggie d with the MACD line flattish moving a hair higher. There is a lot of month left so the MACD may drop to be flat or lower, which would lock in the universal neggie d and call the long-term multi-month top for NVDA. If the MACD remains that tiny hair higher through January, NVDA will likely perform a jog move, down-up, before topping-out long-term in the February-April time frame. Either way, it is coming, and it is very likely that NVIDIA is making its long-term top right now and Emperor Jensen will be singing a swan song for the share price instead of waving another AI chip in the air.

Keystone is not holding NVDA long or short currently but the obvious play going forward is short. Keep tight mental stops since a hyped-up stock like this still has a lot of stupid buyers including Joe Sixpack and Carlos Bagholder. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added Tuesday, 1/14/25, at 6:00 PM EST: NVDA 132.