Key Takeaways
- Vistra shares tumbled Monday after the success of Chinese startup DeepSeek’s AI model led investors to question whether AI will require the huge amounts of computing power and electricity once expected.
- The stock has trended higher within an eight-month rising wedge, but staged a dramatic breakdown below the pattern’s lower trendline during Monday’s selloff in a move that could trigger short-term bearish sentiment.
- Investors should watch major support levels on Vistra’s chart around $107, $85, and $72.
- The measuring principle, which calculates the percentage change between the rising wedge’s two trendlines and adds it to the pattern’s upper trendline value, projects a bullish target of $480.
Vistra (VST) shares fell nearly 30% on Monday as investors questioned whether artificial intelligence will require the huge amounts of computing power and electricity once expected.
Chinese startup DeepSeek’s newest open-source AI model has been found to perform nearly as well as models from American leaders like OpenAI and Google at a fraction of the cost. That has prompted concerns among Vistra investors that the big U.S. tech companies developing cutting-edge AI may not need as much power as previously anticipated.
Shares of the nuclear power company, which more than tripled last year to post the second-biggest gain in the S&P 500, were off to another good start in 2025 amid the optimism about AI-related demand. The stock gave back all its early-year gains today, falling 28% to around $137.
Below, we break down the technicals on Vistra’s chart and identify crucial price levels that investors may be watching.
Rising Wedge Breakdown
Vistra shares have trended higher within an eight-month rising wedge, but staged a dramatic breakdown below the pattern’s lower trendline during Monday’s selloff in a move that could trigger short-term bearish sentiment.
Moreover, the stock registered its highest daily trading volume since early May, indicating selling conviction by larger market players, such as institutional investors and hedge funds.
Let’s turn to Vistra’s chart to identify support levels that could come into play amid further selling and also point out a potential bullish target if the stock resumes its longer-term uptrend and breaks above the rising wedge pattern.
Major Support Levels to Watch
The first major lower level to watch sits around $107, a location on the chart where the shares may encounter buying interest near the prominent May peaks and nearby upward sloping 200-day moving average.
Selling below this level could see the shares decline to the $85 level. Investors may look for entry points in this area near a trendline that links a range of comparable price points on the chart between June and August.
Further downside opens the door for a retest of lower support around $72. The shares may attract buying interest in this region near a horizontal line that connects a series of highs and lows on the chart from late March to early September.
Bullish Price Target to Monitor
To project a bullish target above the rising wedge, investors can use the measuring principle, a technique that analyzes chart patterns to forecast how a future directional move might play out.
When applying the tool to Vistra’s chart, we calculate the percentage change between the rising wedge’s two trendlines and add it to the pattern’s upper trendline value. For example, we add 140% to $200, which projects a bullish target of $480, a location where investors who use technical analysis may look for exit points.
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As of the date this article was written, the author does not own any of the above securities.