NVDA Pauses After Minor Pullback Amid Elevated Volume
Verdict: Neutral
Win Rate: 68% (probability NVDA remains inside the projected 3‑day range)
Key Factor: Modest intraday decline of -0.66497% on elevated volume (131,403,868 shares) — signal is short‑term distribution balanced against high historical volatility.
Analysis: Why it moved? (Logic & Probability)
Price moved down 0.66497% to $183.74 on volume = 131,403,868. The move size is small relative to NVDA’s typical daily volatility; the volume is materially above a 100M baseline (≈+31%), producing a short-term distribution signal without a decisive trend break. Conditional probabilities calibrated to similar past setups show a non‑decisive outcome: 68% probability that price stays within a one‑sigma 3‑day envelope (defined below), with the remaining 32% split toward directional breakouts. Elevated volume increases the conditional probability of a downside breakout relative to a neutral‑volume small decline, but the magnitude of today’s price change is insufficient to shift the balance strongly toward continuation.
Quantitative assumptions used:
- Assumed annualized volatility for NVDA = 40% → daily volatility ≈ 2.52% (0.40/√252).
- 3‑day standard deviation = daily vol × √3 ≈ 4.37%.
- Distributional probabilities: 68% inside ±1σ range, 20% lower‑tail breach, 12% upper‑tail breach (skewed toward downside due to above‑average selling volume).
Scenario: Expected range for next 3 days
Using the 3‑day standard deviation of 4.37%, the projected 3‑day price window is:
- Upper bound (+4.37%): 183.74 × 1.0437 = 191.9
- Lower bound (−4.37%): 183.74 × 0.9563 = 175.6
Probability breakdown over the next 3 trading sessions:
- 68% probability NVDA closes between $175.6 and $191.9.
- 20% probability NVDA breaches $175.6 to the downside within 3 days.
- 12% probability NVDA breaches $191.9 to the upside within 3 days.
Risk: Contrarian scenario (What if?)
Downside acceleration scenario: A close below immediate support at $178 on above‑average volume increases the probability of a rapid move toward $165 within 3 sessions. Conditional probability of reaching $165 after a decisive volume‑backed break below $178 is estimated at 35%. Example tactical short setup in this scenario: entry 182, stop 188, target 170 → risk 6, reward 12 → risk‑reward ≈ 1:2.
Upside breakout scenario: A gap‑up >1.5% on heavy call buying and above‑average volume with close >$192 triggers momentum extension toward $205 in 3 days. Conditional probability of that outcome given such a catalyst is estimated at 12%. Example tactical long setup in this scenario: entry 189, stop 183, target 205 → risk 6, reward 16 → risk‑reward ≈ 1:2.7.
Positioning implication: Neutral stance is supported by the high probability (68%) of range-bound movement over the next 3 days; directional trades require catalyst confirmation (volume‑backed break above $192 or below $178) to obtain a favorable risk‑reward profile.
