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NVIDIA Corporation (NASDAQ:NVDA) Is Facing Technical Resistance

NVIDIA Corporation (NASDAQ:NVDA) hired new CFO Colette Kress, the former CFO of Cisco’s Business Technology and Operations unit.  The company had been without a permanent CFO for two and a half years, since David White resigned in March of 2011.  The stock is up 25% YTD and near a 52 week high, but is this the time to buy or sell NVDA?

Nvidia has had a good year, but not without its difficulties.  The company suffered a loss when Google Inc (NASDAQ:GOOG) launched its second version of the Nexus 7 and decided to go with QUALCOMM, Inc’s (NASDAQ:QCOM) processor, instead of staying with Nvidia’s Tegra4.  Microsoft Corporation’s (NASDAQ:MSFT) Windows RT, which used the Tegra platform, turned out to be a serious disappointment, so that was no help either.  However, a big win for Nvidia’s Tegra platform was the Xiaomi mobile deal in China.  Xiaomi is one of China’s most innovative mobile device companies, and its last handset was the top selling smartphone in China, selling 100,000 units in 90 seconds. 

Even more impressive is that Xiaomi is out selling Apple Inc.  (NASDAQ:AAPL) in China.  Just two years after its inception, the company intends to sell 15 million devices this year in China.  MiPhone 3 offers the choice of Tegra or Snapdragon processors.  The Qualcomm Snapdragon 800 version debuts with China Unicom and China Telecom, while the Nvidia Tegra 4 model will launch with China Mobile, the world’s largest carrier.  Claimed to be the world’s fastest mobile processor, Tegra 4 offers record levels of performance and battery life.  This kind of innovation is a big reason why the stock is trading at yearly highs, and according to the Stock Traders Daly trading report, NVDA is close to testing long-term resistance as well.

The company offers more innovation with its Tegra 4i, which is Nvidia’s first fully integrated 4G- LTE mobile processor, and 4G-LTE is the future of wireless connectivity for mobile devices, especially smartphones so the hopes are high.  Of the various technologies that are driving the market currently, LTE is seeing the strongest growth, as carriers around the world increasingly shift to the new standard for wireless communication. 

Additionally, Nvidia recently announced its next generation Tegra mobile processor, code-named Logan.  The company promises that the new mobile graphics processor will be more powerful than the PS3.  Mobile devices using Nvidia’s new chip are expected to start shipping by mid-2014.  The company's recent development of Project SHIELD, an Android gaming device featuring the Tegra 4 processor, is a new addition to the gaming world that helps users enjoy the digital content in the cloud.

The Tegra platform could be the most important revenue stream for Nvidia over the next few years, and Nvidia seems to be well positioned with a good mix of new innovative products, but that does not necessarily mean the stock is going higher from here.  Stock Traders Daily has NVDA neutral long-term, and close to a test of long-term resistance.  If the stock tests resistance sell signals will surface, short signals too, and by rule a test of support levels should then be expected so long as resistance holds.    

Triggers may have already come
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Red= Resistance
Green = Support

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