NVIDIA is printing a new low for the month, and if we look closely, we can count five waves down as a leading diagonal from the highs. That’s a very specific pattern where waves four and two overlap, which is allowed in this type of structure. So it still qualifies as a reversal pattern and suggests that the market could continue lower after a rebound.
Some temporary support is seen around 194, which could possibly complete this first leg of the higher degree decline before we get an A-B-C rebound. In such a case, potential resistance comes in around the 214 to 218 area while the market trades below the latest high at 236.6, which serves as the short term invalidation level for this pullback.
Overall, it looks like NVIDIA is stepping into a higher degree correction. For those looking for opportunities, I think it’s better to remain patient and wait for larger support zones. Some major support levels come in around the 154 to 160 area.
Highlights:
• Five waves down from the highs can be counted as a leading diagonal.
• Wave overlap between waves two and four supports the diagonal interpretation.
• Temporary support is seen near 194.
• A-B-C rebound could target the 214 to 218 resistance zone.
• Short term invalidation remains at 236.6.
• Higher degree correction appears underway.
• Major support comes in around 154 to 160.
Become a premium member
Get daily Elliott Wave updates for US Single Stocks, SP500,DAX, GOLD, SILVER, CRUDE, FX, CRYPTO, etc. or apply for unlimited access to the Elliot Wave educational videos.