NVDA: Oversold Into Support—Setting Up a Dip-and-Rip Mean Reversion

Overview and current context

• Ticker: NVDA (USD)
• Current price reference: 174.18 (latest print in feed shows 173.82 right after close; we’ll work with 174-area as live zone)
• Today’s (Aug 29) regular-session profile: Open 178.11, High 178.11, Low 173.15, Close ~174.18; heavy volume, persistent lower highs intraday, late-day fade back near lows.
• Multi-week context: Still a powerful primary uptrend from May ($112) to late August highs ($184.47), but last 3 sessions showed distribution and a sharp pullback.

Price trend and structure (multi-timeframe)

• Primary trend (3–4 months): Up. Higher highs and higher lows since May; August printed a new swing high (~$184.47 on 8/28 intraday).
• Intermediate trend (4–6 weeks): Up but flattening into a range. July stair-stepped from ~153 to 173; August extended to 181–184 then failed to hold above 182 on the last two sessions.
• Short-term trend (1–2 weeks): Turning down. Sequence from 8/26–8/29 shows lower highs and a break below the 20-day mean; today’s open-gap-down and selloff confirm near-term weakness.
• Market structure today: Gap down from 180.17 to 178.11, opening drive lower, low at 173.15, mid-day bounce to 177.36, then supply capped the bounce; close near lows indicates sellers in control into the bell.

Support and resistance (classical and market-derived)

• Immediate supports: 173.15 (today’s low), 172.18 (S1 pivot calc), 170.18 (S2 pivot), 170.89 (8/1 low), 168.80 (8/20 intraday low; key swing support).
• Immediate resistances: 175.15 (daily pivot P), 177.15 (R1), 176.89 (50% retrace of 8/19→8/28 leg), 178.49 (38.2% retrace), 180.11 (R2), 180–182 (gap window and supply), 184.47 (swing high).
• Gap structure: Unfilled gap from 8/28 close (180.17) to 8/29 open (178.11). Expect magnetism toward 177–179 on any relief rally, but supply likely reloads near 178–180 on first test.

Moving averages and trend filters

• 20-day SMA (approx): ~179.7. Price now ~3% below this mean, indicating short-term downside momentum and band stretch for potential mean reversion.
• 50-day SMA (est): ~170–171 given June–July prints; price still above, preserving the intermediate uptrend.
• 100/200-day SMAs (est): Low-to-mid 150s; long-term trend strongly bullish.
• Read-through: Pullback below the 20-day but above 50/200-day = corrective dip within a dominant uptrend; typical context for buy-the-dip tactics near support/bands.

Momentum oscillators

• RSI(14) (approx): ~33. Approaching oversold (<30). Bearish momentum but near a zone where reflex bounces often originate.
• Stochastic (14): Near the floor, as price sits at/near the 14-day low; setup for a potential %K/%D cross up if price stabilizes above ~174–175.
• MACD(12,26,9): Likely a recent bearish crossover with expanding negative histogram after the breakdown under the 9-EMA; short-term momentum remains negative but ripe for a snapback on any positive close.

Volatility and ranges

• ATR(14) (approx): ~4.0–4.5. Expect next 24h statistical range of roughly ±1 ATR around the session midpoint; i.e., a move to 177.5–178 on a bounce or to ~170–171 on further weakness is feasible.
• Bollinger Bands (20,2): Mid ~179.7; lower band est ~174.7 (assuming ~2.5 SD). Today’s print legged through/pierced the lower band (~174.2–174.7 zone), indicating a short-term oversold excursion and a mean-reversion probability edge.
• Z-score vs 20-day mean: Roughly -2.0 sigma near 174, reinforcing reversion risk.

Volume, participation, and distribution

• Volume Aug 28: ~282M (elevated). Aug 29 YTD: ~242M by 20:00—also heavy. Two consecutive high-volume down days = distribution, but also exhaustion potential.
• Intraday profile (8/29): Early sellers, midday short-cover bounce, late-day supply; however, the inability to break new lows after 16:30 and a small late bounce suggests some covering into the close.

Pivot points (classic, using 8/29 H/L/C 178.11/173.15/174.18)

• Pivot P: (H+L+C)/3 ≈ 175.15
• R1: 177.15; R2: 180.11
• S1: 172.18; S2: 170.18 Interpretation: Price closed below P, bias bearish into the open; first upside target on a bounce is R1 ~177.15; failure to reclaim P keeps pressure toward S1 (172.18).

Fibonacci retracements (8/19 swing low 168.80 to 8/28 swing high 184.47)

• Range: 15.67
• 38.2%: 178.49; 50%: 176.89; 61.8%: 175.29; 78.6%: 172.37 Interpretation: Today’s close sits just under the 61.8% zone; typical corrective troughs often form between 50–61.8–78.6. The 172.3–175.3 band is a high-probability battle zone for a low.

Ichimoku lens (daily, qualitative)

• Price likely above the cloud with Tenkan near 179–181 and Kijun estimated near 173–175. Price probing the Kijun suggests a potential equilibrium check; holding above Kijun favors a bounce; a daily close decisively below elevates risk of a deeper pullback toward 170/169 (Span A/B support).

Elliott Wave framing (heuristic)

• The 8/19→8/28 advance appears impulsive; today’s decline resembles an A-B-C corrective sequence, currently near a typical C-leg termination between 61.8% and 78.6% retracement. This leans toward an early next-session bounce attempt unless 172.3 breaks with force.

Mean reversion vs momentum trade-off

• Momentum case (short): Two heavy-volume down sessions, sub-20DMA, MACD negative, and gap-down continuation support further downside toward 172/170.
• Mean reversion case (long): Lower-BB pierce, RSI ~33, deep fib zone (61.8–78.6), proximity to Kijun, and ATR extension suggest a bounce toward 176.9–178.5 is likely within 1 session if 172–173 holds.
• Confluence tilt: Long setup has better asymmetric reward near 173–174 with risk defined under 171.2–172.2 and targets in the 176.9–178.5 supply band.

Intraday microstructure (Aug 29) and what it implies for next 24h

• Lower highs: 175.23 → 174.85 → 174.27 → 177.36 spike → fade. Sellers still active on bounces.
• However, the late spike to 177.36 shows shorts may cover aggressively on any lift. This increases the odds that an early dip into 173s attracts buyers and sparks a reflex test of 176–177.

Probable path scenarios (next 24 hours)

• Base case (55%): Early dip toward 173.2–172.8, holds above S1 (172.18), then mean-reverts to 176.5–177.6, potentially tagging R1 (~177.15). Close in upper half of the day’s range near 176–177.
• Bear case (25%): Breakdown through 172.18 → 171.3 → 170.2 (S2), with weak bounces capped under pivot P (175.1). Close 170.5–172.5.
• Bull squeeze (20%): Quick reclaim of pivot P (~175.1) off the open, momentum through R1 (177.1), partial gap-fill toward 178.5–179.9. Close ~178.

Risk management notes (for framing the trade)

• If long near 173.3, technical invalidation sits under 171.2–171.5 (loss of S2 path proximity and break of August shelf). Reward zone 176.9–178.5 offers ~+2.1% to +3.0% upside vs ~-1.0% to -1.2% downside to a tight stop; R:R ≈ 2:1 to 2.5:1.

Tool-by-tool summary of signals

• Trend MAs: Long-term bullish; short-term corrective. Neutral-to-slightly bullish for mean reversion long.
• RSI/Stoch: Near oversold; bullish for bounce.
• MACD: Bearish short-term; argues to scale into strength rather than chase.
• Bollinger: Lower-band pierce; bullish for bounce.
• Fib/Pivots: Price in 61.8–78.6 fib zone with S1 at 172.2 and R1 at 177.1; favors a bounce toward R1 if 172s hold.
• Volume: Elevated selling could be near exhaustion; watch first 30–60 minutes for confirmation (higher low above 173, reclaim of 175 pivot).

Final synthesis

• The confluence of lower-band pierce, RSI near 30s, deep fib retracement, and proximity to Kijun support argues for a tactical long over the next 24 hours, aiming for a mean-reversion pop into 176.9–177.6. A protective mindset is warranted if 172.2 fails; but probability-weighted outcome favors a “dip-and-rip” rather than immediate cascade.

Trade plan (24h horizon)

• Direction: Buy (Long)
• Optimal entry: 173.30 limit (in the 173.2–173.6 support shelf; improves R:R and sits just above today’s low and S1 buffer).
• Profit objective: 177.60 (first resistance cluster: R1 ~177.15 and 50% retrace ~176.89; allow for slight overshoot).