Watch These Nvidia Stock Price Levels Amid Earnings Drop

Nvidia (NVDA) shares fell in extended trading Wednesday after the artificial intelligence (AI) company’s quarterly earnings beat expectations, but investors were disappointed as recent data showed a slowdown in growth. The chipmaker has wowed Wall Street in recent quarters with stellar earnings reports fueled by insatiable demand for artificial intelligence, raising the bar for its latest earnings report.

While Nvidia shares are up about 150% year to date, they have seen significant price volatility in recent months, falling as much as 33% between July and August before making an impressive recovery ahead of their earnings release and trading just 11% below their all-time high as of Wednesday’s close.

Nvidia shares fell 6.9% to $116.95 in after-hours trading on Wednesday.

Below, we’ll take a closer look at Nvidia’s chart and use technical analysis to highlight key levels to watch in terms of price action following the earnings announcement.

Expected breakout from rectangle formation

After an impressive rebound from this month’s low, Nvidia shares have consolidated in a narrow rectangle shape over the past seven trading sessions ahead of the company’s highly anticipated earnings report. While volume remains relatively low, trading in the stock has picked up this week, indicating a portfolio rebalancing ahead of quarterly results.

The forecast earnings-led decline on Thursday means the stock could fall below the recent rectangle and 50-day moving average, which could trigger further weakness in the stock.

Looking ahead, investors should monitor four key price levels that could come into play if the AI ​​darling’s shares continue to fall following its earnings announcement.

Nvidia Price Tiers to Look Out For

The first is hovering around $116. This area could provide initial support near the trend line connecting the May high and the peak of the small bounce that occurred in early August.

A drop below that level could send the stock down to $107, a place on the chart where buyers could be looking for entry points near a series of similar trading levels for the stock between May and August.

Further selling could lead to a retest of the key $97 level, where Nvidia shares would likely encounter significant support near two highs from March, the first of which was the stock’s previous all-time high.

Finally, it is worth noting the $91 area, the lower price objective anticipated when separating the July-August downtrending stripe pattern and positioning it from the top of the recent rectangle formation. If such a move were to occur, it would confirm the stock’s downtrending channel and could set up a possible retest of this monthly low.

Comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Please read our disclaimer for more information.

As of the date of this writing, the author does not own any of the above securities.