Wave Y Zigzag Structure
Wave (Y) is under way and is set out as a zigzag. From the end of wave (X), wave A reached $173.11. Wave B is developing as another zigzag, with wave ((a)) ending at $188.88. A brief dip in wave ((b)) is expected, followed by a rise in wave ((c)) to finish wave B. The analysis keeps $203.62 as the key pivot level. The suggested wave (Y) target sits in the 100%–161.8% Fibonacci extension of wave (W), between $127.7 and $154.2. With a short-term rally in Wave B expected, traders could consider near-term bullish positions. Buying call options with expirations in late March or early April 2026 might capture the anticipated final push toward the $190-$200 area. This bounce comes despite the latest February 2026 CPI report coming in slightly hotter than expected at 3.2%, which has generally dampened market sentiment. However, we see this rally as a temporary setup for a larger move lower. As long as the price stays below the critical $203.62 pivot from last year, the overall corrective structure remains valid. Bearish traders should be preparing to initiate positions once this Wave B bounce shows signs of exhaustion.Broader Semiconductor Backdrop
The broader semiconductor environment supports this cautious view. Recent data released in early March 2026 by the Semiconductor Industry Association showed a slight dip in global chip sales for January, pointing to some softness in enterprise spending. This aligns with the idea that the stock needs to digest its significant gains from the run that started back in April 2025. Once Wave B completes, buying put options dated for May or June 2026 would be a direct way to play the expected decline in Wave (Y). A more conservative strategy involves using bear call spreads with a short strike above the $203.62 pivot point. The ultimate target for this downward move sits in the $127.70 to $154.20 zone. We should remember that after the massive run-up we saw through 2024 and 2025, a complex correction like this is not unusual for Nvidia. Looking back, we saw a similar multi-month correction in the latter half of 2021 before the next major leg up, suggesting such patterns are part of the stock’s long-term cycle. Implied volatility will likely rise as the next leg down begins, making put options more expensive but also potentially more profitable. Create your live VT Markets account and start trading now.
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