Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?
According to Dubravko Lakos-Bujas, JPMorgan’s chief equity strategist, there’s a potential “surprise” shock looming over the stock market, as reported by Bloomberg. Lakos-Bujas pointed out a historical trend where gains in popular momentum stocks like NVDA are often followed by corrections. This pattern has manifested itself three times since the 2008 global financial crisis.
Lakos-Bujas elaborated during a webinar, stating, “One day this may happen completely unexpectedly. This has happened in the past; we’ve had flash collapses. One large fund starts cutting some positions, a second fund hears this and tries to reposition, a third fund is basically caught off guard, and then, you know, we start to unwind more and more momentum.” He highlighted the potential for innovation in artificial intelligence as a significant source of surprise, underscoring the diminishing opportunities and growing risks in the background.
A technical analysis of NVDA shares reveals the following:
→ The price has been following an upward trend, delineated by the blue channel.
→ Yesterday’s close brought the price down to its median line.
→ The $960 level appears to pose a significant resistance.
With the all-time high reaching approximately 100% of NVDA’s share price at the beginning of the year — effectively doubling in less than 3 months — a correction seems inevitable in this highly volatile market. It’s plausible that NVDA’s price may retreat to the lower boundary of the channel and test the psychological level of $800 per share.
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