NVDA, AVGO, TSM Outlook – Semiconductor Stocks Drift Lower in Premarket Trading

NVDA Technical Analysis

The semiconductors are struggling a little bit in the early hours and this of course includes Nvidia, which is down about $2 from the close on Friday. But quite frankly, Nvidia finds itself in the midst of pretty significant consolidation. One of the biggest problems Nvidia faces right now was during the last earnings call where all of the numbers came out better than anticipated, but they did suggest that perhaps they may be down about 20% in sales in 2025.

Again, that is projecting out long-term, so that’s a little bit difficult to do. And all one has to do is look at the chart to see that Nvidia has been in an uptrend for what seems like a lifetime. Now, for what it’s worth though, the market seems to have plenty of support all the way down to at least $127.50.

AVGO Technical Analysis

Over in Broadcom, we see that in pre-market trading, we are down about $3, but it recently had gapped much higher with surprise earnings coming out, and of course, we just had the dividend day. Now, having said that, all eyes will start to focus on the next earnings report, February 27th.

So between now and then we may get some chop. We do have this massive gap after the earnings call, which should offer support all the way down to $190. That being said, it looks more or less like a market that is trying to form a new range, which makes sense considering it’s the end of the year and liquidity will dry up.

TSM Technical Analysis

Taiwan Semiconductor has also dropped just a touch in the early hours in pre-market trading, but it should be noted that out of the three, this is by far the strongest. So, if you’re looking to get involved in semiconductors, this might be the first place you start to put money to work. The $210 level continues to offer significant resistance, with the $185 region offering significant support.

The 50 day EMA is currently at the $194 level and rising at a nice 45 degree angle. All things being equal, you can look at the last few months as potentially some type of cup with handle or rounding bottom, although it’s not a bottom, that shows that the market is trying to stretch to the upside. If we can clear $210, TSM should do quite well.