NVIDIA Corporation (NASDAQ:NVDA) ended the last trading session with a sharp loss of 7.40% after reporting a poor first quarter result and a weak guidance for the second quarter. The earnings per share came at $0.24 against the expected $0.26 though it perfectly met the EPS $0.24 of the same quarter in the previous year. The revenue was reported at $1.15 billion against the projected $1.16 billion, a deficit due to the forex headwinds according to the company. The second quarter revenue is expected to be $1.01 billion by the company, against the analysts’ expectation of $1.185 billion. The second quarter guidance is also going to be hit by a restructuring charge of $100-$125 million.
Technically, NVIDIA Corporation (NASDAQ:NVDA) has been trading for the last 4 years in the yearly range established in 2010 and has been unable to go beyond that. The year of 2011 saw a rapid loss of most of the gains made in the previous year, in the form of a decline to $12 levels from the high of $26. The stock traded in the range of $12-$16 for the next 2 years and finally rallied in 2014 to reach close to $24 levels. The entire price action has taken the form of a Rounded Bottom, which makes it difficult to pinpoint the target, especially in the last phase of the pattern. So it is nearly impossible to determine if the high of $23.60 is the final high of this year or not.
Analyzing the recent price action in the last few days, one can come to the conclusion that the bulls must provide support right now from $20 levels or at most $19 levels to keep the medium term bullish momentum intact. Otherwise it would be difficult for the bulls to see the stock retesting the old support area in the band of $16-$17 levels.
