By Doug Busch
The recent breakout attempt in Nvidia is starting to look vulnerable.
Bulls are still in control but their grip isn't firming. Perhaps we will shortly see why the stock did not participate in the enormous semiconductor rally the group enjoyed.
The VanEck Semiconductor ETF's parabolic upward move might show signs of fatigue after recording a rare doji candle last week, which often predicts potential trend changes from the prevailing direction.
Notice that volume during the current five week winning streak has been subpar compared with prior weeks, when volume was robust during declining weeks. The fund is now more than 150 points above its rising 50 week simple moving average, making a prudent pullback a possibly healthy development.
Looking at the daily chart bears might be excited by the possibility of a double top just above the very round $200 number. It coincides with the peak from last Nov. 4, when a bearish island reversal occurred. That started a quick 20% drawdown, followed by sideways action after a very nice price run from April 2025 into November.
It did indeed break out above a double bottom pivot of $197.73 on April 15, but it is now facing a rare five session losing streak on Monday. Technicians often say the best breakouts work right away, and continue to march higher. So this retreat is a bit of a red flag. Notice on the ratio chart against the VanEck Semiconductor ETF has lagged behind since last October. This retest is critical for the name to hold right here as it still has a chance to accelerate higher, but each passing day makes that less likely. Remain bullish above $185.
Nvidia was trading around $199 Monday.
The weekly chart also suggests some fragility. The double top at $200 showed eerie similarities as both the week ending Nov. 7, 2025, and last week recorded bearish engulfing candles closing at the lows of their respective weekly ranges. Last year's example declined 7% while last week fell 5%.
Notice volume was elevated both weeks and there has been some frequent distribution, which is a bit worrisome. Couple that with the bearish RSI divergence, where the RSI made a lower high as the price made a higher one and bulls should be thinking somewhat defensively.
Until Nvidia can deliver clear follow-through, the risk remains that this move may have been a false start rather than the beginning of a sustained advance.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
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(END) Dow Jones Newswires
May 04, 2026 15:21 ET (19:21 GMT)
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