Here is your Bonus Idea with links to the full Top Ten:
NVIDIA (NASDAQ:NVDA), $NVDA, has been in the news a lot lately. Tied to Bitcoin mining for its excellent graphics chips, whenever the price drops in line with a drop in Bitcoin it is deemed the cause. Just like when Bitcoin was rising it was deemed to be pulling NVIDIA stock price up with it. That tie may be true, at least to some extent, but the price of NVIDIA stock has been rising in a steady channel since May 2016. Where Bitcoin is off 63% from its high in November, NVIDIA is about flat to that level after the recent pullback.
The rise has been along its 100 day SMA and the current pullback found support there last week. The up day Friday confirmed a Morning Star reversal off of that 100 day SMA. The RSI also turned higher Friday, but has been trending lower in a channel. The MACD is falling and now negative as it starts to level out. There is support at 218 and 204 then 198.50 and 195.50. Resistance higher sits at 240 and 252. Short interest is low at 2.1% and the company is expected to report earnings next on May 7th.
The April options chain shows biggest open interest at the 250 strike on both sides. The May 11 Expiry options just opened Thursday and look to have very little open interest, but show an implied move between now and expiry of about $30. The May monthly chain has been around longer and shows open interest concentrated at 210 on both sides and then the majority above with a spike at 250. June options have biggest open interest at 230 on the call side with size holding up to 250 as well. On the put side it is biggest lower centered on 210.
NVIDIA, Ticker: $NVDA
Trade Idea 1: Buy the stock now (over 222) with a stop at 218.
Trade Idea 2: Buy the stock now (over 222) and add a May 230/200 Put Spread ($10.35) selling a September 280 Call ($10.95).
Trade Idea 3: Buy a May 200/235/250 Call Spread Risk Reversal ($1.00 credit).
Trade Idea 4: Buy an April/May 250 Call Calendar ($6.65).
After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which as the books closed on the 1st Quarter of trading saw the equity indexes with their first down quarter in over 2 years and hanging onto long term bullish trends by a thread.
Elsewhere look for Gold to consolidate with a downward bias while Crude Oil turns from an uptrend to consolidation. The US Dollar Index continues to move sideways while US Treasuries are biased higher. The Shanghai Composite and Emerging Markets look to continue to consolidate, the Shanghai Composite at the retest of lows and Emerging Markets at their highs.
Volatility looks to remain elevated keeping pressure on the equity index ETF’s SPY (NYSE:SPY), iShares Russell 2000 (NYSE:IWM) and PowerShares QQQ Trust Series 1 (NASDAQ:QQQ). Their charts show that the bleeding has stopped in the short run, but no strength for a reversal at this point. That said the longer trend remains to the upside. Use this information as you prepare for the coming week and trad’em well.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.