NVIDIA has traded in a rising parallel channel for most of the past year. Late last week, the price broke below the lower boundary. This was the second break below the channel this month, which points to a more corrective phase.
The old channel floor at $189.95 now acts as resistance (role reversal). A close back above $189.95, and back inside the channel, would cancel the breakdown. If the stock cannot reclaim $189.95, more selling and stop-loss triggers may follow.
If weakness continues, the first support level is $169.56. This area may attract buyers and could lead to a retest of the broken channel line from below. If $169.56 fails, the next support is $153.13. That level would mark a deeper pullback inside the longer-term uptrend.
Overall, the trend is weaker while the stock stays below $189.95. If selling pressure continues, $169.56 and $153.13 are the next key levels to watch.
Because the stock recently broke below the main channel that guided NVIDIA through 2025, we now see this as a chance to position for more weakness or a period of sideways trading. One direct approach is to buy put options with March or April expirations. Strike prices near the $170 support level can target a continued drop. This also hedges against the loss of momentum after last year’s historic rally.
The former support at $189.95 is now the most important resistance level. If you think a sharp rebound is unlikely, consider selling bear call spreads with the short strike just above $190. This can be a higher-probability trade as long as the stock stays below this new ceiling. Options data supports this shift: the 30-day put-to-call ratio has risen to 1.2, up from the 0.7 average in the final quarter of 2025.
With the next earnings report expected in a few weeks, implied volatility (now 48%) may rise. That would make option premiums more expensive. The breakdown also comes right after last week’s industry-wide warnings about slowing data center demand, which increases the chance of a big move. For traders expecting a sharp move but unsure of direction, long straddles or strangles may be attractive.
If this drop turns out to be a bear trap, similar to the brief dip in September 2025, selling bull put spreads is another option. By placing the short put strike below the minor support at $169.56, you can collect premium while betting that this first support level holds. Even after the pullback, the stock’s forward P/E is 55, still well above the semiconductor sector average of 32. That high valuation could make a quick recovery harder.
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