How will China's warning against Nvidia and AMD chips affect Nvidia's (NVDA) short-term stock price?

Short‑term impact:

The Chinese government’s public admonition to avoid Nvidia’s H2O‑series chips (and the parallel warning to AMD) adds a fresh regulatory head‑wind to Nvidia’s near‑term fundamentals. Even though the warning is narrowly scoped to a specific product line, it signals a broader geopolitical risk that can curtail a fast‑growing export pipeline to the world’s largest AI‑hardware market. In the short run, market participants will likely price‑in a 2‑4 % downside as the news drifts into the “regulation” category (sentiment –45) and traders adjust risk‑premiums.

Technical view:

NVDA has been trading in a tight 10‑day range around the $440–$460 band, with the 20‑day SMA still holding above the 50‑day SMA—a bullish bias. However, the daily chart now shows a bearish divergence: the price is still near recent highs while the RSI has slipped from the 70‑zone toward 55, and the MACD histogram has turned negative. A break below the $440 support level could open a short‑term correction toward the $420–$410 zone, while a hold above $440 would suggest the market is simply digesting the news without a sustained sell‑off.

Actionable take‑away:

Given the regulatory shock and the emerging technical weakness, a cautious short‑bias is warranted for the next 5‑10 trading days. Traders could look to sell‑or‑short on the bounce to $460 with a stop just above $452 (to protect against a quick rebound if the warning is seen as limited) and target the $420–$410 range. If the price holds above $440 and the momentum indicators stabilize, the short‑bias can be trimmed, and a long‑bias can be re‑established as the broader AI demand narrative re‑asserts its upside.