Above is a daily chart of NVDA, and in the lower pane I’ve plotted a ratio line of NVDA versus the SPY. This is one of my favorite ways to strip away the noise and see what a stock is really doing relative to the broader market. When that ratio line starts to lead, I pay very close attention.
Today NVDA broke a minor support level, and that alone is worth noting. But what really caught my eye is what’s happening beneath the surface. The ratio line has already broken down to a new low, well ahead of any dramatic move in price. That tells me NVDA is not just pulling back with the market, it’s underperforming it. This kind of relative weakness often shows up before price makes a more meaningful move lower.
From a trading perspective, aggressive traders had an opportunity today. When that minor support gave way, a partial short on the break made sense, especially with the ratio line already confirming weakness. When price and relative strength align like that, I’m much more confident in the trade thesis.
Looking ahead, the level I’m focused on now is 169.55. This is a more significant support area, and it’s where things could really get interesting. If NVDA breaks below that level, especially if the ratio line continues to make new lows, it could open the door to further downside over the coming days. That’s the spot where I’m watching for a potential add or a fresh entry.
The key takeaway for me is simple, price tells you what is happening, but relative strength often tells you what’s about to happen. Right now, the ratio line is flashing a clear warning that NVDA is weaker than it appears on price alone.
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