NVIDIA has traded within a rising parallel channel for most of the past year, but price moves late last week broke below the lower boundary. This was the second break beneath the channel this month, suggesting a move into a more corrective phase.
The former channel floor at $189.95 now acts as resistance under the role reversal concept. A close back above $189.95 and back inside the channel would negate the break, while failure to reclaim it may lead to further selling and stop-loss triggers.
If weakness continues, the first support level is $169.56, which may attract buyers and set up a retest of the broken channel line from below. If $169.56 does not hold, attention shifts to a lower support area at $153.13, which marks a deeper pullback zone within the longer-term uptrend.
Overall, the trend has weakened while the stock remains below $189.95. Moves towards $169.56 and $153.13 are the next levels to watch if selling pressure persists.
Given the recent break below the primary channel that guided NVIDIA through 2025, we are now viewing this as an opportunity to position for further weakness or a period of consolidation. Buying put options with March or April expirations, targeting strike prices near the $170 support level, is a direct way to trade a continued downward move. This strategy hedges against the stalling momentum that defined last year’s historic rally.
That former support at $189.95 is now our most critical resistance level to watch. For traders who believe a sharp recovery is unlikely, selling bear call spreads with the short strike just above $190 offers a high-probability way to profit as long as the stock remains below this new ceiling. The options market reflects this shift, as the 30-day put-to-call ratio has climbed to 1.2, a sharp increase from the 0.7 average seen in the final quarter of 2025.
With the next earnings report anticipated in a few weeks, we expect implied volatility, currently at 48%, to rise, making option premiums more expensive. This technical breakdown, coming just after last week’s industry-wide warnings on slowing data center demand, suggests a significant price move is possible. This makes strategies like long straddles or strangles appealing for those who anticipate a sharp move but are uncertain of the direction.
Alternatively, if we view this as a bear trap similar to the brief dip seen in September of 2025, selling bull put spreads is a viable strategy. By placing the short put strike below the minor support at $169.56, we can collect premium while betting that the first line of defense will hold. Even after this pullback, the stock’s forward P/E ratio sits at 55, still well above the semiconductor sector average of 32, suggesting valuation could be a headwind against a quick recovery.
