February 24, 2025 at 05:08PM
📢 NVDA Update: Algos Buy the Anchored VWAP from Feb 3 Low—Now Watching if It Holds
NVDA traders and investors, machines just stepped in at NVIDIA’s (NVDA) anchored VWAP, drawn from the Feb 3 major low (~$130.24). As price pulled back, algo-driven buying emerged, reinforcing this level as key support.
🔹 What This Means:
Anchored VWAP held on first test—suggesting institutional interest.
If price holds above $130, momentum could rebuild toward $138-$142.
A break below $130 would shift focus to lower support zones.
🚨 Now Watching: Will this level hold or break? With earnings in 2 days (Feb 26), expect volatility. Stay alert for confirmation or failure at this VWAP zone. 🚀
Understanding Anchored VWAP: A Key Institutional Trading Tool
What is Anchored VWAP?
The Anchored Volume Weighted Average Price (AVWAP) is a technical indicator that provides traders and investors with a price benchmark, weighted by volume, from a specific point in time. Unlike the traditional VWAP, which resets daily, Anchored VWAP allows traders to “anchor” the calculation to significant market events, such as earnings reports, major highs/lows, or breakout levels.
How is Anchored VWAP Calculated?
The formula for Anchored VWAP is:
AVWAP=∑(Price×Volume)∑VolumeAVWAP = \frac{\sum (Price \times Volume)}{\sum Volume}
Where:
Price is the trade price at each transaction.
Volume represents the number of shares/contracts traded.
The summation is cumulative from the chosen “anchor point” forward.
By anchoring VWAP to a specific date or event, traders can see how price behaves relative to a fair value zone determined by institutional activity.
Why Does Anchored VWAP Matter?
Institutions and algorithms often reference Anchored VWAP as a dynamic support or resistance level, especially at significant turning points in the market.
🔹 Key Reasons Why AVWAP is Important:
Institutional Benchmark: Many hedge funds, mutual funds, and trading algorithms use AVWAP to assess whether they are buying or selling at a favorable price relative to average transaction cost.
Support & Resistance Zones: If price is trading above Anchored VWAP, it suggests buyers are in control; if price falls below it, sellers may be dominant.
Liquidity & Mean Reversion: Price often gravitates toward AVWAP, acting as a magnet for liquidity where large players accumulate or distribute shares.
Breakout & Retest Confirmation: When price crosses AVWAP with strong volume, it can signal a sustained breakout. Conversely, a failure to hold AVWAP may indicate trend weakness.
Event-Based Trading: Anchoring VWAP to earnings reports, FOMC meetings, or major highs/lows provides context for how market participants are positioned.
Why This Matters for NVIDIA (NVDA) Now
In the current NVDA setup, AVWAP is anchored to the major Feb 3 low (~$130.24). As price revisits this level, algos and institutional players appear to be defending it. If it holds, we may see buyers step in for a potential continuation move. However, a breakdown below AVWAP could signal weaker momentum and further downside risk.
🔎 Key Level to Watch: Will the AVWAP Support Hold or Break?
With earnings in two days (Feb 26), NVDA’s reaction to this level will be crucial in shaping short-term price action. Visit ForexLive.com for more updates.
This article was written by Itai Levitan at www.forexlive.com.
