After days of struggling to surpass the $120 resistance level, Nvidia’s share price is finally gaining positive momentum. This comes after the company failed to keep up with the general market’s bullish trend following the Federal Reserve interest rate cut. As of press time, Nvidia’s stock is up over 4% and trading at $121 during the September 24 session.
This recent surge has helped Nvidia recover from losses on the weekly chart, with a 4.8% increase. However, the stock’s volatility is still evident on the monthly chart, where it has corrected by over 3%.
So what is driving Nvidia’s stock rally now? It seems that investor sentiment is turning bullish due to a shift in insider trading dynamics. CEO Jensen Huang recently completed selling the maximum number of shares under a previously agreed trading plan. This news has sparked positive sentiment among investors, who were concerned about the stock’s short-term outlook due to Huang’s selling spree in recent months.
Huang’s trading plan was set to expire in March 2025, but he has already offloaded all six million shares ahead of schedule. According to filings, these shares were sold between June 14 and September 13, resulting in approximately $713 million in net profit. Other top executives, such as Tench Coxe and Colette Kress, have also sold their stakes in the company.
Despite the CEO reducing his stake, Nvidia’s stock rise indicates a positive shift in investor sentiment. Insider sales can create uncertainty and pressure to sell, but once these sales are complete, that pressure eases and allows the stock to recover. Investors likely view Huang’s sales as part of a routine trading plan rather than a lack of confidence in the company’s future.
Looking ahead, Nvidia’s stock trajectory seems promising. Technical analysis suggests that the stock is signaling possible continued strength. It has surged to new month-to-date highs and broken out dramatically after bouncing off the 50-day simple moving average. The stock also shows an ascending trend line that has supported it over the past week. Breaking through the resistance near $120, along with a bullish crossover, further confirms the strength of this move.
Beyond the technical outlook, Nvidia still has strong underlying fundamentals. The company plays a crucial role in the general artificial intelligence chip space and is experiencing high demand for its chips. The upcoming Blackwell chips are expected to drive further growth.
In conclusion, despite insider sales from key executives, Nvidia’s recent stock surge reflects growing investor confidence in the company’s long-term prospects. With strong technical indicators and sustained demand for its AI chips, Nvidia is well-positioned for continued growth.
