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Nvidia looks poised for a pullback after its strong start to 2024, according to Wolfe Research. When the stock market opened Monday, Nvidia reached Wolfe’s recent target of $600 a share, leaving it “now deeply overbought and due for a consolidation,” said Rob Ginsberg, Wolfe’s technical analyst, in a note to clients. The maker of critical artificial intelligence processors has already jumped 20% so far in January, building on its 239% gain from 2023. But now Nvidia sports a 14-day relative strength index reading above 74, according to FactSet. The RSI measures the magnitude and speed of price movements, with any figure over 70 signaling that a stock is overbought and potentially ripe for selling. Nvidia and peer chip maker Advanced Micro Devices have recently hit all-time highs, helping boost the entire semiconductor industry to new records even after one of the group’s best years since 2009. The AI darling also has helped power the broader stock market, with the S & P 500 pushing to new records both Friday and Monday, eclipsing the prior high from January 2022 and entering a new bull market . Meanwhile, the Dow Jones Industrial Average punched up above 38,000 for the first time ever. NVDA YTD mountain Nvidia shares have gained nearly 20% this year If Nvidia is vulnerable to a pullback, it’s far from alone, according to Ginsberg. Super Micro Computer , another AI play, similarly has an RSI of about 76. Wolfe is not inclined “to chase vertical moves,” and at such times would rather harvest some gains, the analyst wrote. — CNBC’s Michael Bloom contributed reporting
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