Nvidia shares boost after increased demand

July 29, 2021 15:00

One of the companies that has had the best performance in the stock market during the last year is that of Nvidia.

From the lows of March 2020, close to $180, the company has experienced a spectacular bullish rally that led the stock to surpass $810 per share in early July, a growth of more than 350%.

This spectacular growth is due to a number of reasons, such as the improvement in the expectations of the sector by:

  • The shortage of microprocessor chips that currently exist in the market
  • The increased demand for its graphics cards used among others in the cryptocurrency industry

At the end of May, the company announced that on July 21 it would make a split of 4 to 1 of its shares, that is, each old share would then become 4 new shares.

This decision was the result of doubts among the company's executives about the company's high share price. The management of the company considered that such a high price could detract from the interest of investors and slow down the bullish rally of the company, which is currently in a very sweet moment.

The split finally occurred on July 20. The stock ended the trading session at $748 and the 21 was starting to trade at $187 as indicated in the chart below with the horizontal ochre line.

Source: Admirals MetaTrader 5, NVDA, Daily - Data range: from March 9, 2021 to July 29, 2021, conducted on July 29, 2021 at 11:30 am CET. Please note: Past performance is not a reliable indicator of future results.

 

The daily chart above shows Nvidia's share price evolution from March 9th to today, on a daily basis.

In the pre-opening of the market on July 21, the stock rose more than 4%, and finally the lows recorded on the day were $189.50 per share.

The split level at $187 and the day 21 low at $189.50, son the two benchmark levels that traders have used to buy Nvidia stocks in the last 3 days.

This situation together with the evolution of the RSI indicator could indicate, that this level is consolidating, and the path is clear for a new advance whose next reference level is located at $208.5 and represents the historical highs of Nvidia shares.

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