NVIDIA Chart Signals Potential Downside Toward $145 - Here’s Why

By Harsh Shah · Updated 2026-10-18

Disclaimer: This information is for educational purposes only and should not be considered financial advice.

We keep hearing the same narrative everywhere: NVDA is heading to new all-time highs… it will cross $200 again.

But whenever I hear statements like that, I do one thing first — I look at the chart.

And right now, the chart is telling a very different story.

NVDA has formed the infamous Head and Shoulders pattern — a structure that typically signals potential downside and is considered bearish if it confirms.

👉 I’d called out a similar pattern on MSTR around $350 — a level from which the stock has since dropped to nearly $170 (a ~50% decline)[read here]
👉 I also highlighted the same structural risk on OKLO[read here].

Let’s break down this pattern and understand what the chart is really saying.

The Head & Shoulders

The Head & Shoulders is one of the most classic bearish chart patterns in trading.

It signals that an uptrend is losing steam and sellers are taking control.

An uptrend is characterized by consistently higher highs and higher lows over time.

What It Looks Like

Left Shoulder: Price rallies, then dips slightly.
Head: Price rallies again — this time to a higher high — then pulls back.
Right Shoulder: Price rallies once more, but fails to reach the height of the head. Sellers step in earlier.

At the bottom of the pattern is the neckline (acting as support). Once price breaks below it and confirms, the trend has officially turned bearish.

Why the Name — Head & Shoulders?

The pattern looks like a person’s head and shoulders:
- A high peak (the head)
- Flanked by two smaller peaks (the shoulders)

Except this time, it’s right side up — not inverted like its bullish twin.

The Psychology Behind It

Why does this work? It’s all about shifts in confidence.

• Left Shoulder: Bulls are confident, pushing price up. Sellers take minor profits.
• Head: Bulls make one last big push (higher high). Optimism is at its peak.
• Right Shoulder: Price rises again but with less conviction. Smart money is selling.
• Neckline Break: Once price falls below support, panic sets in. Bulls capitulate, sellers take over.

Simply put:

👉 Buyers get weaker.
👉 Sellers get stronger.
👉 Breakdown = momentum shift confirmed.

Key Rules for Identifying the Head & Shoulders

✅ Symmetry: The pattern should look balanced. A lopsided formation reduces its reliability.

✅ Head Must Be Tallest: The central peak (head) must clearly be higher than the two shoulders.

✅ Neckline Angle: A flat or slightly upward-sloping neckline is best (0° to 45°). Avoid steep downward slopes — they weaken the setup.

Determining the Target

To calculate the price target:

1. Measure the vertical distance from the head (highest peak) to the neckline (support).
2. Project that same distance downward from the point where the stock breaks the neckline.
3. That projected point is your profit target.

Why This Helps You Trade

The Head & Shoulders is powerful because it:

• Signals a clear momentum shift — from uptrend to downtrend.
• Provides structure for entries — short below the neckline.
• Offers risk management — stop loss usually goes above the right shoulder or any confirmed close above the neckline.
• Provides a profit target — the “head-to-neckline” distance often projects the next move.

Power Factors (When the Pattern is Strongest)

• Location: Most powerful when it forms after a strong uptrend (at market tops).
• Timeframe: Longer timeframes give stronger signals. A Monthly > Weekly > Daily.
• Confirmation: Always wait for a neckline break (with volume, ideally).
• Retest Entry (Scene of the Crime): Ideal entry is on a retest of the neckline after the breakdown. If it doesn’t retest, you can still enter, but risk/reward may be lower.

Now, lets take a look at the NVDA setup.

NVDA — Head & Shoulder Chart Pattern Formation

At the moment, NVDA is attempting to break down from the Head & Shoulders pattern, but the move is not yet confirmed.

For confirmation, price must close below the low of the breakdown candle — in this case, any decisive daily close below $175. Until that happens, the pattern remains untriggered and should be treated with caution.

You can read more about confirmation signals here.

Past Case Studies: MSTR

OKLO: Head & Shoulder breakdown in Play

Final Thoughts

The NVDA chart is flashing early warning signs, not confirmation.

The Head & Shoulders pattern is still untriggered. Until we see a clear daily close below ~$175, this remains a potential setup — not a trade.

If price breaks and holds below the neckline, downside momentum can accelerate. If the pattern fails, NVDA could squeeze higher and trap early shorts.

This is why I don’t predict — I wait for confirmation.

Let price decide.