NVIDIA Corporation (NVDA), the semiconductor and AI giant, saw its shares plummet by over 5% today, March 7, 2025, as market volatility and sector-wide pressures intensified. The stock, which has been a standout performer in the tech sector, is now testing critical support levels, raising concerns about its near-term trajectory. In this article, we’ll break down the factors behind the selloff, analyze key technical indicators, and explore what’s next for NVIDIA stock.
Why Is NVIDIA Stock Falling?
NVIDIA’s decline is driven by a mix of broader market headwinds and sector-specific challenges. Rising interest rates and macroeconomic uncertainty have weighed heavily on the tech sector, with high-growth stocks like NVIDIA bearing the brunt of the selloff. Additionally, investors are taking profits after the stock’s AI-driven rally, which has pushed its valuation to elevated levels. Geopolitical risks, particularly U.S.-China tensions over semiconductor exports, have further clouded the company’s growth outlook.
Chart Analysis: Key Support Levels in Danger
1. RSI Nearing Oversold Territory
- The 14-day RSI stands at 35.53, approaching the oversold threshold of 30. While this could signal a potential rebound, it also highlights the stock’s current weakness.
- Historically, NVIDIA’s RSI has bounced back strongly from these levels, making this a critical area to watch.
2. MACD Confirms Bearish Momentum
- The MACD line at -2.13 is below the signal line (-4.64), indicating sustained bearish momentum.
- The negative histogram value of -2.50 suggests that the downtrend may continue in the near term.
3. Testing Key Support Levels
- NVIDIA’s stock is now testing critical support levels, with the next major floor around $XXX. A break below this level could trigger further selling.
- The stock has been in a downtrend since its late 2024 peak, and today’s drop adds to the bearish technical setup.
4. Elevated Trading Volume
- Today’s trading volume was significantly higher than average, indicating strong selling pressure. This could signal that institutional investors are reducing their positions.
What’s Next for NVIDIA Stock?
Bullish Scenario
- If the RSI rebounds from oversold levels and buyers step in, NVIDIA could see a short-term bounce.
- Long-term growth drivers, such as its dominance in AI and data centers, remain intact, providing a solid foundation for recovery.
Bearish Scenario
- If the MACD continues to show bearish momentum and key support levels are breached, the stock could face further downside.
- A break below critical support could lead to a deeper correction, testing lower price levels.
Key Takeaways for Investors
- Short-Term Traders: Watch for a potential rebound if the RSI moves out of oversold territory, but remain cautious given the bearish MACD.
- Long-Term Investors: Focus on NVIDIA’s strong fundamentals and leadership in AI, which could drive future growth.
- Risk Management: Consider setting stop-loss orders to protect against further downside, especially if key support levels are broken.
NVIDIA’s stock remains a cornerstone of the tech sector, but today’s selloff highlights the risks of market volatility and geopolitical uncertainty. While the long-term outlook remains promising, investors should tread carefully in the near term.
