The bull run of Nvidia stock (NASDAQ: NVDA) continues as the shares hit record highs on Thursday. The rally seems unstoppable as the investors keep on injecting fresh capital into the tech behemoth. However, after a record-breaking run, many technical indicators are looking exhausted which could be a top signal.
On Thursday, equity markets remained mixed as another inflation gauge showed a significant decline in producer prices during May. The S&P 500 index and the Nasdaq 100 index opened higher, but the former turned red after a while. However, the resilient tech sector kept the latter 98 points until press time.
The US Federal Reserve has kept the interest rates the same for the 7th consecutive time. In his remarks after the recent FOMC meeting, Fed Chair Jerome Powell noted that the central bank hasn’t yet had enough confidence to cut rates yet. The Fed also revised its outlook to just one rate cut in 2024, causing global stocks to tumble.
With a 2.24% uptick on Thursday, Nvidia stock price emerged as the biggest gainer among the tech equities. The chip manufacturing markets are currently facing production constraints amid unprecedented demand. According to the latest reports, Nvidia (NVDA), along with its peers, Apple (AAPL), Qualcomm (QCOM), and Advanced Micro Devices (AMD), have fully booked the 3nm chip capacity at Taiwan Semiconductor Manufacturing Company.
The recent Nvidia stock split has made the price more attractive for small investors while not impacting the company’s market valuation. In fact, Nvidia’s market cap has now soared to $3.15 trillion, which is another record for the tech giant.
For a broader outlook on the stock, let’s analyze Nvidia chart on a 4-hour timeframe. As visible on the following chart, the stock is trading within an ascending channel which depicts a buying frenzy among the traders. Such patterns are often formed close to the local market tops.
While the longterm Nvidia stock prediction remains fairly bullish, the bearish divergences on the 1D Relative Strength Index (RSI) and the Money Flow Index (MFI) are signaling toward at least a short-term correction in the coming weeks. In case of such a pullback, the price gap below $123 would be very critical.