Overbought signals spur reversal concerns for Nvidia stock after rapid gains

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Nvidia rises 5.21% to $209.23 today

Highlights

Nvidia has excluded all expected China data center revenue as US export curbs block H200 GPU sales, forcing Chinese customers toward Huawei alternatives.
The company faces heightened legal risk from a US class-action lawsuit over crypto mining disclosures and intensifies supply chain scrutiny after a supplier smuggling indictment.
Price trades near session highs with strong bullish momentum and high volatility; expected range is $201–$217, but overbought signals warn of short-term pullback risk.

Regulatory restrictions and legal risks weigh on Nvidia revenues

US export restrictions continue to prevent Nvidia from selling advanced H200 GPUs to China, leading prominent Chinese developers such as DeepSeek to turn to Huawei chips. Nvidia has eliminated all expected data center revenue from China as a result of this trade barrier and has increased global supply chain monitoring and shipment controls following a recent smuggling indictment involving supplier Supermicro. Meanwhile, Nvidia faces a class-action securities fraud lawsuit in the US linked to statements about crypto mining demand, with the legal process underway in the 9th Circuit. These developments highlight regulatory and legal challenges for the company.

Dominant price action amid overbought signals and weak ADX trend

Technically, NVDA trades above the SMA-20 ($186.50), SMA-50 ($184.64), and SMA-200 ($182.61), while the Ichimoku Kijun level at $183.97 marks immediate support. The MACD points to upward momentum, but the ADX reading of 15.57 signals a weak, trendless market. Momentum indicators show mixed signals: the RSI at 63.36 and CCI at 84.19 indicate strong buying pressure, whereas Stoch RSI and Bull/Bear Power suggest overbought conditions. The price opened with a gap higher ($201.94 vs. $198.86) and sits near the session high, with ongoing elevated volatility and persistent intraday strength; however, overbought oscillators imply traders should remain watchful for potential reversals.

Upside bias holds as volatility shapes near-term trading range

Over the next five sessions, NVDA is expected to trade within a range of $200.99 to $217.23, a band that corresponds to typical volatility relative to current levels. There is a very high probability (more than 80%) of further upside, though a pullback cannot be ruled out. The baseline scenario anticipates sideways consolidation between $201 and $217, while a breakout above $217 could trigger additional gains. Conversely, a drop below $201 would signal risk of a sharper correction.

Anton Kharitonov, expert at Traders Union, sees Nvidia’s technical setup as strong but highlights significant headwinds from ongoing US export restrictions and legal risks. He remains cautious given the mixed signals from momentum indicators and overbought readings, as well as the company’s complete exclusion of data center revenue from China. The base case stays neutral within the $201–$217 band, with upside limited by external pressures. "Without a clear break above $217, the rally lacks conviction and I remain defensive until legal and regulatory risks ease."

Earlier, analysts noted that Nvidia maintained a broadly bullish technical stance despite emerging regulatory and operational challenges. The latest surge above prior consolidation strengthens this outlook, but with heightened volatility and persistent overbought signals, traders should closely monitor for a breakout beyond $217 or the risk of a pullback below $201 in the sessions ahead.

Source of Data: NVDA Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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