Why Nvidia stock is set for a major breakout retest next week

Core Viewpoint - Nvidia's stock is experiencing a strong rally, approaching new resistance levels, with a target of $200, and has gained over 35% year-to-date [1][6]. Technical Analysis - Nvidia's stock recently broke above a critical resistance zone near $184, which had limited price movement for much of August and September [2]. - Following the breakout, the stock briefly rallied toward $190 before a slight pullback, indicating a potential retest of the prior resistance now acting as support [4]. - If the price holds above the $184 and $185 area, it suggests a continuation of the rally, with a Fibonacci extension projecting an upside target near $197.18 [4]. - The stock appears to be forming a cup-shaped base, a bullish pattern that often precedes significant upward movements [4]. Market Performance - The Relative Rotation Histogram (RRH) indicates Nvidia's outperformance against the S&P 500 is turning positive again, suggesting increasing strength relative to the broader market [5]. Analyst Sentiment - Several Wall Street analysts remain bullish on Nvidia, citing its dominant position in the artificial intelligence sector [6]. - Cantor Fitzgerald maintains an Overweight rating on Nvidia shares with a price target of $240, highlighting the company's role as the "de facto AI infrastructure company" [6]. - Analysts dismissed concerns regarding market "circularity" or an AI bubble, emphasizing Nvidia's robust fundamentals [6]. Financial Strength - Nvidia reported a revenue growth of 71.55%, a gross margin of 69.85%, and $72 billion in levered free cash flow [7]. - The company has a current ratio of 4.21 and a debt-to-equity ratio of 0.11, indicating strong financial health [7].