NVDA Volatility Shock After Breakdown: Favor Selling the Relief Bounce (24h Bearish Bias)

Market Context (from provided OHLCV)

Current price: $174.19 (latest regular session close shown: 2026-02-04 21:00Z close ~174.19, with after-hours prints around 177.41).

1) Multi-timeframe trend read

Daily (Oct 2025 → Feb 2026):

• Price peaked in late Oct near 212 and has been making lower highs since then.
• A major downside impulse occurred Nov 20–21 (large red candles + very high volume), shifting regime from “dip-buy uptrend” to a distribution / downtrend.
• Another meaningful breakdown leg occurred into mid-Dec, printing lows around 170–175.
• January attempted recovery back to ~192–194 (Jan 28–30), but failed and rolled over again.
• The last three sessions show accelerating weakness:
  • Feb 2: close ~185.61
  • Feb 3: close ~180.34 (big down day; low 176.23)
  • Feb 4: close ~174.19 (low 171.91)

Conclusion: Intermediate trend is bearish, with momentum deteriorating into Feb 4.

Hourly / intraday (Feb 4):

• Early hours traded ~179–181, then a sharp selloff into the open (14:30Z) and follow-through lower toward 173–174.
• Small rebounds occurred, but lower high structure persisted; close ~174 indicates sellers defended bounces.
• The 21:00Z bar shows very wide range (high print up to ~185.55 and low ~166.03). That kind of spike often signals liquidity sweep / volatility shock rather than stable bullish reversal. In practice, such bars frequently precede mean reversion first, then trend continuation—and given the dominant daily downtrend, odds favor bearish continuation after a relief bounce.

2) Support/Resistance mapping (price-based)

Nearby supports:

• 173.0–171.9: intraday floor area (Feb 4 low 171.91; multiple hourly lows clustered).
• 170.9–170.3: December swing low zone (Dec 17 close ~170.94), a key “line in the sand.”
• 166: referenced by the 21:00Z low print (if valid, it becomes a downside magnet on renewed selling).

Nearby resistances (likely sell zones):

• 177.2–179.6: breakdown area (Feb 4 hourly closes, plus Feb 3/4 pre-selloff region).
• 180.3–181.7: prior session close region and intraday supply (Feb 4 morning highs).
• 185.6–187.2: Feb 2 close / breakdown origin (heavy overhead supply).

3) Momentum & breadth proxies (inferred from price action)

(Exact indicator values like RSI/MACD require calculation; below is inference from structure and candle sequencing.)

• Momentum: Consecutive lower closes (185.6 → 180.3 → 174.2) signals negative momentum and likely RSI in/near oversold. Oversold does not mean buy; it often means “a bounce is possible,” but trend can keep pushing.
• Trend strength: Failure to reclaim the ~190–194 January swing area confirms bears still control the medium-term tape.
• Volatility: Range expansion (big true ranges Feb 3–4) indicates high volatility regime. High vol in a downtrend typically favors selling rallies rather than buying dips.

4) Volume / participation

• Daily volumes on the major down legs are elevated (Nov 20–21, and again Feb 3–4 are high vs many surrounding days), consistent with distribution and risk-off positioning.
• Feb 4 hourly volumes show heavy activity during the drop and into the late session, suggesting capitulation-like selling, but not yet a clean reversal base.

5) Pattern & market structure setups

• Bear flag / breakdown continuation: The January rebound to ~192–194 looks like a corrective rally within a broader downtrend; Feb 2–4 breakdown suggests continuation.
• Potential “dead-cat bounce” zone: After a strong 2–3 day selloff, it’s common to see a reflex bounce toward first resistance (177–180) before resuming lower.
• Key level test: If price fails to reclaim and hold 180, downside retest of 172 then 170 becomes likely.

6) 24-hour outlook (probabilistic path)

Given the dominant daily downtrend + fresh breakdown + elevated volatility, the highest-probability 24h path is:

1. Relief bounce attempt into 177–179 (possibly up to ~180–181 if squeeze).
2. Sellers defend that supply zone.
3. Price drifts/presses back toward 173–172, with risk of a wick to 170–169 if broader market is weak.

Bias: Bearish continuation, with choppy mean-reversion swings.

7) Trade plan logic (why Short is favored)

• Trend alignment: Daily structure is lower highs/lower lows since late Oct peak.
• Breakdown confirmation: Feb 2→Feb 4 is a clean loss of prior support (185→180→174).
• Volatility regime: Better risk/reward to sell into bounce than chase lows.
• Clear invalidation: A sustained reclaim above ~181–182 would weaken the short thesis.

Therefore: Sell (short), ideally on a bounce into resistance.

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Practical levels (entry/exit)

Because current price is near support, an “optimal” short is not at the exact low; it’s at a bounce into supply.

• Optimal open (short): $178.80 (inside the 177.2–179.6 resistance band; good balance of fill probability and R:R)
• Take-profit / close: $171.40 (just above the 170.9–170.3 major support zone to increase fill probability)

(If price never bounces to 178.80, the setup is skipped rather than forcing a poor entry.)

Risk note (not requested but essential in practice): a reasonable invalidation area would be above ~181.7–182.0 on an hourly close.