Image Source: Pixabay

Surely no stock on the planet is more talked about right now than Nvidia (NVDA).

Nvidia stock premarket this morning was still sitting near its all-time high price of $785.75 per share, which it hit yesterday after a bumper earnings call.

As a result of all this, the Nvidia share price has been subject to a lot of noise.

Many investors are wondering if the stock will now correct downwards after reaching such dizzy heights – or is the sky the limit for the heir apparent to the AI revolution?

How to use technical analysis to cut out the noise 

For those wanting a simple, headline-free understanding of where a stock price may be headed next, there’s nothing like technical analysis.

So, we asked our very own Invezz analyst, Crispus Nyaga, to take a look at the Nvidia stock price… using Renko charts.

What are Renko charts? 

Renko charts are a lesser-known Japanese chart style, which gets rid of the candlestick timeframe by categorising a chart into blocks or bricks, each of a set price size which you determine. This leads to a far less ‘noisy’ and clean reading of stocks subjected to lots of hype.

What Renko charts reveal about the Nvidia stock price

This is what Invezz analyst Crispus Nyaga had to say about Nvidia’s Renko chart:

Looking at the daily renko chart, we see that the stock recently made a strong bullish breakout, rising above the key resistance at $735, its highest point on February 14th. It has also formed seven consecutive green bars.”

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Furthermore, Nyaga has reason to be bullish on Nvidia still:

 

Looking back, the stock has a record of making over 15 green bars. Therefore, in this case, there is a likelihood that the stock has more room to go based on its historical performance. If this happens, the next point to watch will be at $800. Flipping that level will open the possibility of it jumping to $1,000.”

Other technical analysis on Nvidia

But Nyaga wasn’t done with Nvidia yet – there was more that technical analysis could reveal about the mega stock.

 

Nvidia stock has remained above the 50-week and 100-week Exponential Moving Averages (EMA), signaling that bulls are in control. The Average Directional Index (ADX) has moved above 45, which is a positive thing. The Relative Strength Index (RSI) has moved above the extremely overbought point of 86. Other oscillators paint the same picture.”

(Click on image to enlarge)

Meanwhile, with the Wyckoff Method, Nyaga says that “there are signs that the stock has moved to the mark-up phase of the Wyckoff Method. This phase is characterized by more demand of an asset.”

This, too, means a good sign that Nvidia may still have room to push even higher, says Nyaga:

Because of the growing momentum, the stock will likely continue rising in the near term. However, a short-term pullback cannot be ruled out. In this case, the key support and resistance levels to watch will be at $700 and $1,000.”

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