US stocks staged a strong recovery Wednesday, with the S&P 500 rising 0.4% and the Dow Jones Industrial Average gaining 0.4% to 209 points, as reported by Associated Press. The Nasdaq composite climbed 0.3%, with technology and communication services stocks leading the charge. Nvidia surged 3.3%, lifting the Dow Jones significantly, while Meta added 2.2% and Netflix rose 1.8%. The market's resilience comes after a downbeat start to the week, with the S&P 500 now positioned to snap a three-day losing streak. Dell Technologies jumped 13% for the biggest gain among S&P 500 stocks after delivering strong second-quarter profits amid accelerating demand for artificial intelligence computing and raising its fiscal year revenue outlook.
Nvidia (NASDAQ:NVDA) remains one of the most important stocks to watch after its latest earnings report, with the stock initially delivering the 70-session move investors were looking for by jumping more than 8% and pushing into the gap zone. However, as reported by Investing.com India, the following session brought a 4.5% decline, moving back into the upside gap created during Thursday's rally. The key level now is the 70-session moving average, with failure to maintain this breakout potentially meaning Thursday's move was a false upside breakout rather than the beginning of another leg higher. The hourly chart provides another level to monitor, with Nvidia currently holding above its 200-session extended moving average, which has previously acted as support. A break below this hourly 200 could increase the probability of Nvidia eventually losing its 70-session moving average on the daily chart.
Microsoft (NASDAQ:MSFT) and Palantir (NASDAQ:PLTR) both show similar warning signals despite their stronger technical structures. According to Investing.com India, both stocks have developed divergences between price and RSI during their latest advances, with the 70-session moving average being the critical level for both companies. For Microsoft, the stock needs to maintain the $477 support zone to avoid a deeper correction, while Palantir's recovery has taken the stock back toward the highs reached at the end of 2025. The RSI has remained above the 70 zone during the latest move, showing that the stock still has considerable momentum. A more constructive outcome would require Oracle to break above the 70-session average and create enough distance for the moving average to regain a positive slope, with a subsequent break above the 200-session moving average providing an even stronger signal.
Oracle's (NYSE:ORCL) setup is more fragile, with the stock reaching a crucial support area around the 70-session moving average and the $137 to $140 region. As reported by Investing.com India, Oracle subsequently rebounded from around $118 but has run into resistance at the 70-session moving average. The stock is currently holding above approximately $136, with $135 to $136 representing the critical short-term support zone. When a stock has already experienced a substantial decline and reaches a level where buyers would ideally need to appear strongly, immediate resistance from the 70-session average suggests demand remains relatively weak. A renewed break below $135 to $136 would increase the probability of a return to the bearish scenario and could confirm the head and shoulders formation that has been developing. The longer-term chart reinforces the importance of this level, with Oracle previously experiencing a strong correction after a divergence between price and RSI, but the stock respected the $370 area and subsequently rebounded sharply.
Nio (NYSE:NIO) is approaching a crucial $3.70 support area that could determine whether its potential rounded bottom thesis remains valid. According to Investing.com India, the stock has declined approximately 4% in the previous session and another 4% in the latest session, with the RSI moving clearly below the 30 level. The monthly chart indicates a possible rounded bottom pattern that has been forming over a prolonged period, with the declines around April 2025 potentially corresponding with the midpoint of this potential rounded bottom that has been forming over roughly three years, dating back to late 2023. The major resistance level around $7.16 remains the key target. The high trading volume accompanying the latest decline is especially interesting, with heavy volume early in a selloff indicating strong selling pressure and further downside, while heavy volume near major support can signal a transfer of shares from more speculative sellers to longer-term buyers. For now, there is no confirmed bullish signal on Nio, but the next sequence will be crucial for confirming this bullish pattern.
