Stock Market Analysis: Is NVDA Losing Its Leadership?

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?

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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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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Disclaimer: The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.

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