NVDA crashes, losing $30.79 (-5.75%) within a single day
NVIDIA Corporation (NVDA) Technical Analysis Report for Oct 28, 2020 | by Techniquant Editorial Team
NVDA ended Wednesday at 505.08 tanking $30.79 (-5.75%), notably underperforming the Nasdaq 100 (-3.93%). This is the biggest single-day loss in over a month. Today's close at 505.08 marks the lowest recorded closing price since September 24th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 527.66, NVIDIA confirmed its breakout through the previous session low after trading up to $23.29 below it intraday.
Daily Candlestick Chart (NVDA as at Oct 28, 2020):
Wednesday's trading range has been $25.99 (4.92%), that's far above the last trading month's daily average range of $15.10. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for NVDA.
Two candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and one bearish pattern, the Black Candle.
The share closed below the 50-day moving average at 524.28 for the first time since April 3rd.
Crossing below the lower Bollinger Band for the first time since March 16th, prices have shown unusually strong downward momentum in the short-term. This could either indicate a potential selling climax after which prices might head back up towards the mean of the Bollinger Bands at 545.51 or signal the beginning of a strong momentum breakout leading to even lower prices. The last time prices broke out below the lower Bollinger Band on March 16th, NVDA actually gained 10.63% on the following trading day.
While the stock is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for NVIDIA. Out of 92 times, NVDA closed higher 65.22% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 64.13% with an average market move of 2.91%.