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Nvidia Share Price Rises By More Than 10 Percent Post-Split. Is A Retracement Imminent?

Nvidia share price declined on Monday, going down by 1.5 percent in the intraday session to trade at $129.70. The move broke a three-session rising streak by the AI chipmaker, although the share price also touched a post-split high price of $133.73. Nvidia’s stock split price was at $120, meaning it has risen by as much as 10 percent, 10 days after the split.

Recent actions by NVIDIA’s top executives could also put a strain on the share price in the weeks following the stock split. Top on the list is CEO Jenseng Huang, who notified the SEC last week that he will be selling 120,000 shares worth around 15 million. Executive VP for operations, Deborah Shoquist also sold $45 million worth of his stock earlier in June. While this is nothing out of the normal, some investors might interpret it as a lack of confidence by the company’s leadership on its future performance.

On multiple occasions, Nvidia almost single-handedly kept the S&P 500 afloat with its AI exploits creating a bullish sentiment in a high-interest environment. However, the fuel is likely to run out after the stock split, and trigger a retracement in the absence of high-impact news from the company. The biggest driver of the post-split correction by NVDA is likely to be profit-taking by shareholders who held the stock in the first quarter of the year. However, the upside to the stock split is that it has made the share price affordable to more retail investors, which could lead to a continuation of the upside in the coming weeks.

Technical analysis

The momentum on Nvidia share price signals that the sellers are currently in control, with the pivot likely to be at 130.48. The downside will likely continue if resistance remains at that mark, with the first support likely to be at 128.62, but extended control by the sellers could break that mark, sending the action lower to test 126.85.

Alternatively, a move above 130.48 will favour the buyers to take control, with the first resistance likely to come at 132.42. If the buyers extend their control at that point, they will likely breach the resistance, invalidating the downside narrative and building the momentum to test 133.96.