Citron Turns Bullish On Nvidia, But Technicals Still Look Ugly

It has been a bloodbath for U.S. tech stocks in the past couple of months, and semiconductor giant NVIDIA Corporation NVDA is no exception. However, Nvidia investors received some welcomed relief from the selling pressure Tuesday after high-profile Nvidia bear Citron’s Andrew Left said he's actually buying the dip in Nvidia.

Left Gets Bullish

In a Tuesday tweet, Left said the roughly 40-percent drop in Nvidia shares in the past three months has created the first buying opportunity he’s seen in at least two years.

Citron buys $NVDA. This is the first time in 2 years stock offers an appealing risk-reward to investors. $NVDA still a player in AI and Data..will eat through inventory issue. We see $165 before we see 120. Anyone remember this interview? MUST WATCH https://t.co/azGG9yyWLE

— Citron Research (@CitronResearch) November 20, 2018

Several Wall Street analysts have weighed in on Nvidia stock since its disappointing earnings report sent the stock crashing last week. Analysts are still mostly bullish on Nvidia in the long term, but the stock will have to overcome some negative technical momentum before it can regain its recent highs.

Despite Tuesday’s bounce, Nvidia’s post-earnings sell-off still has the stock trading at near 52-week lows. To make matters worse, Nvidia recently followed a number of other top tech stocks in logging a bearish death cross of its 50-day simple moving average crossing below its 200-day SMA.

Levels To Watch

Unfortunately, Nvidia may not find longer-term technical support until it reaches the $120 level that served as resistance in late 2016 and early 2017. If the bounce carries the stock higher in the near term, look for Nvidia to run into resistance at around the $200 level after it potentially closes its earnings gap.

In the meantime, Nvidia will likely have a wide trading range as technical sellers battle fundamental dip buyers like Left.

Askslim.com’s Steve Miller recently said Nvidia appears to still be in the declining phase of its current cycle, but the stock may find a bottom sooner rather than later.

“Our current projection is for a decline to around $152, and then a bounce in December,” Miller wrote following the earnings report. Nvidia shares have since dropped as low as $133.31.

Related Links:

What To Do With Nvidia's Stock After 20% Fall?

Nvidia Gets Burned On Earnings: This Chart Shows More Pain Ahead