Nvidia crashed during the trading session on Friday as risk appetite has left the market quite rapidly.
Nvidia dropping over 6% shows just how much panic there was in the market as the interest rates in America have jumped.
Furthermore, there are a lot of concerns due to the fact that the Federal Reserve is likely to keep interest rates higher for longer, with the problem being that these technology stocks typically fail in that environment.
That being said, the Nvidia market is likely to continue to be very noisy, and I do think that what we've got is a situation where the 50-day EMA being pierced, of course, is a negative turn of events. The $200 level underneath should be a bit of a support level and, of course, a large round psychologically significant figure that will attract a lot of headlines.
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Interest Rate Sensitivity and Support Levels
I still believe that ultimately Nvidia goes higher, but we need to see some type of bounce first in order to get involved. This type of panic that we had seen on Friday suggests that the market is going to continue to be a bit fickle and fragile, but I also recognize that if we see the interest rates in the United States start dropping, especially if we drop below the 4.50% level, then we could see some of these artificial intelligence stocks really start to take off.
I do believe that shorting Nvidia is almost impossible, but we probably have quite a bit of volatility ahead of us. This is a market that a lot of patience will probably be needed, but the buyers will almost certainly return given enough time, or perhaps help from rates.
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