NVIDIA Corporation (NASDAQ:NVDA) stock is trading lower on Friday, trailing broader market gains as a failed technical breakout raises concerns about near-term selling pressure.
The stock slipped about 0.4%, while the Nasdaq gained 0.5% and the S&P 500 rose 0.57%.
Analyst Warns of Bull Trap
Freedom Capital Markets Chief Market Strategist Jay Woods warned that NVIDIA’s recent retreat after breaking above $235 could signal a potential bull trap.
Speaking on CNBC on Friday, Woods explained that a bull trap occurs when a stock breaks above resistance but fails to sustain the rally.
He identified $215 to $220 as a potential downside range if selling continues.
However, Woods remains bullish on NVIDIA’s long-term prospects, citing its attractive historical valuation and strong fundamentals.
He said the stock needs two or three consecutive closes above $240 to confirm a fresh breakout. Such a move could open the door to $270.
Woods also expects the next phase of the broader bull market to emerge in late November or early December.
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Earnings and Analyst Outlook
Investors are also looking ahead to NVIDIA’s next earnings report, tentatively scheduled for Nov. 18.
Analysts expect earnings of $2.38 per share, compared with $1.30 a year earlier. Revenue is projected to reach $104.19 billion, up from $57.01 billion.
Wall Street maintains a Buy consensus rating, with an average price forecast of $342.38.
Cantor Fitzgerald maintained its Overweight rating and $350 price forecast on Oct. 1. Rosenblatt reiterated its Buy rating and $390 forecast on Sept. 29.
ETF Exposure
NVIDIA also holds significant weight in several exchange-traded funds, including the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (NYSE:GSLC), with a 9.83% allocation, the Pacer Data and Digital Revolution ETF (NYSE:TRFK), with 9.92%, and the First Trust Innovation Leaders ETF (NYSE:ILDR), with 9.86%.
These sizable holdings make the funds sensitive to NVIDIA’s stock performance, while ETF inflows and outflows can also influence trading activity in the chipmaker’s shares.
NVDA Price Action
NVIDIA shares were down 0.44% at $229.47 at the time of publication Friday, according to Benzinga Pro data.
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