NVDA Relief Rally Hits Supply: Short the 185 Retest for a Mean‑Reversion Fade

Multi‑timeframe technical read (Daily + intraday)

1) Price context & structure

• Current price: 183.32 (latest tape around 183.41–183.43).
• Last daily close (2026‑01‑21): 183.32 after a strong rebound day (low ~178.40, high ~185.38).
• Key recent swing:
  • 2026‑01‑16 close ~186.23 → 2026‑01‑20 close 178.07 (sharp risk‑off drop) → 2026‑01‑21 close 183.32 (mean‑reversion bounce).
• Market regime (daily): broad range / distribution since late Nov–Jan with repeated failures above ~188–193 and supports forming around ~175–178.

Interpretation: the 1/21 move looks like a bounce off support rather than a confirmed trend reversal. After a big down day (1/20), the next day’s recovery is typical short covering + dip buying; follow‑through is not guaranteed.

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2) Support / resistance mapping (price memory)

Using repeated pivots and high-volume reaction zones in the provided series:

Major support zones

• 178.0–176.5: frequent reactions (late Nov, mid Dec, 1/20 close 178.07; several intraday prints ~177–178).
• 175.0–174.0: notable breakdown/low cluster (12/12 close ~175.02).
• 170–171: December capitulation low (12/17 close ~170.94).

Major resistance zones

• 185.4–186.3: 1/21 intraday high ~185.38; prior congestion; acts as immediate supply.
• 188.0–189.7: repeated late Dec / early Jan stall area.
• 192–193+: prior distribution shelf; multiple failed pushes.

Implication for next 24h: Price is currently inside resistance overhead (185–186) and above support (178). That creates a mean‑reversion trading box: 178–186 with a bias depending on whether 185–186 breaks.

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3) Candlestick & price action signals

• Daily 1/20: large bearish candle (range expansion) → signals sellers in control short-term.
• Daily 1/21: strong recovery (close well off lows; reclaimed 180) → bullish retracement candle, but it did not reclaim the prior swing area near 186–188.
• Intraday (1/21):
  • Early push toward ~182.7, pullback to ~179.35, then trend up to ~185.38, followed by fade back to ~183.3–183.4 into the close/after-hours.

Interpretation: intraday shows buying strength was sold into near 185.4. That is typical of a bear-market rally / relief bounce until proven otherwise.

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4) Momentum (RSI-style inference)

Exact RSI can’t be computed precisely here without a full rolling calculation, but we can infer:

• The drop from ~186 to ~178 in one session likely pushed short-term oscillators toward oversold.
• The immediate next-day rebound to ~183 typically normalizes RSI toward midrange.

Implication: momentum is recovering, but after a sharp mean-reversion bounce, upside tends to stall at first resistance (185–186) unless new demand enters.

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5) Trend & moving-average logic (qualitative)

From the sequence:

• Price spent much of Dec/early Jan in the 185–190 area, then broke down to 178.
• A one-day rebound to 183 is still below the likely short-term average that sits near the prior consolidation (mid/high 180s).

Implication: trend followers will treat this as below short-term trend resistance; rallies into ~185–188 are likely to be sold unless the stock reclaims and holds above.

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6) Volatility & range expectations (ATR logic)

Recent daily ranges expanded notably:

• 1/21 daily range roughly ~7 points (178.4 to 185.4).
• 1/20 also large.

Implication (next 24h): Expect wide, two-sided trading. With elevated ATR, both a retest of 185+ and a dip back toward 180 are plausible within a single session.

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7) Volume / participation read

• 1/21 volume ~198.5M: strong participation.
• 1/20 volume ~223.3M: also heavy.

Interpretation: heavy volume down then heavy volume up often signals institutional repositioning and high disagreement. That typically produces a range more than an immediate clean trend.

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8) Pattern logic: breakdown → retest setup

This is a common sequence:

1. breakdown from consolidation (mid/high 180s) to 178,
2. rebound back into the breakdown zone (183–186),
3. sellers defend and price rolls over unless it cleanly reclaims.

Key level to watch: 185.4–186.3. Failure there favors short continuation back toward 180/178.

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24‑hour directional forecast (probabilistic)

Base case (highest probability):

• Slight bearish / range-down bias.
• Expect an attempt to probe 184.8–185.8; if rejected, price drifts back toward 181 → 179–178.

Bull case (secondary):

• Clean break and hold above 186 could squeeze toward 188.5–189.5.

Bear case (tail risk):

• Loss of 180 opens a faster move to 178, then 175.

Given the strong sell response near 185.4 and the broader range/distribution context, the better edge for the next 24 hours is selling into resistance.

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Trade plan (optimal entry/exit)

Decision: Sell (Short Position)

• Rationale: post-drop relief rally that faded at first major resistance (185.4). Price remains below the prior supply shelf (186–189). Elevated volatility favors mean reversion back toward support.

Optimal open (entry)

• Prefer a limit short near resistance rather than market at 183.3.
• Open Price (short): 185.20 (just below the 1/21 high zone; aims to get filled on a retest while avoiding chasing).

Take-profit (close)

• First meaningful support is the 1/20 close / demand zone.
• Close Price (take profit): 179.20 (front-runs the 178.9–178.0 support pocket; realistic within elevated ATR).

(If price never retests 185.2, the setup is missed; chasing shorts around 183 increases whipsaw risk in this volatility regime.)