Get started

Optionstrading

NVDA Melt UpThe Play NVDA experiencing a surge in stock price since October 2022. On Monday 5/15/2023, call options @ $282.50 strike were trading between $2.80 - $3 mid-morning. Fast forward to the end of regular market trading today, Thursday 5/18/2023 call options @ $282.50 strike are trading around $32. $3 to $32 - Is there more room to run?! Let me pull out the crystal ball & shine it up a bit. The widening SMAs (20/200) are definitely suggesting a natural pull-back. Furthermore, I think it's important to ask the question - what happens after a melt-up? The Play is to trade the technicals long until a clear sign of pullback or reversal. Cut losses quickly - Ciao! Reasons to Buy: Highlights NVIDIA is a cash-rich company with a strong balance sheet. As of Jan 29, 2023, nearly $13.3 billion in cash equivalents well-covering the $9.7 billion in debt. NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the company is expanding its base in other untapped markets like automotive, healthcare, and manufacturing, which will support its earnings and revenues. Reasons to Sell: Highlights The United States and China’s tit-for-tat trade war is a major threat to the company. This is because the United States is the largest semiconductor manufacturing country with China being its biggest importer. The competition between NVIDIA and AMD has taken a meaningful turn. Previously, NVIDIA and ATI made graphics chips for the PC market. Later AMD acquired ATI and combined the CPU and parallel graphics chip into a single component. AMD is now making an effort to strengthen its position in the commodity graphics segment and CPUs for console gaming systems. The acquisition of Xilinx by AMD has posed a new competitive challenge for NVIDIA in its fast-growing data-center chip market. With around 69% of sales derived from foreign sales (outside the US) any unfavorable currency fluctuation & uncertain macroeconomic environment may moderate the company’s growth. Things to look out for Continued melt-up followed by a meltdown. About the company NVIDIA Corporation is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. Over the years, the company’s focus has evolved from PC graphics to artificial intelligence (AI) based solutions that now support high-performance computing (HPC), gaming, and virtual reality (VR) platforms.
NASDAQ:NVDA
by KyleUSA
Chop or Pop? Tackle This Week's Tricky Market On $ES_F & $SPYIntraday Update Coming into this week, ES tested support at 4112 Friday with a double bottom. So far it’s been a choppy start to the OPEX week, with key support at 4132-29. There have been six round trips between ~4150s and 4120s, and we observed good follow-through in the market. 4155 just rejected down to 4136. Last Week We saw the market consolidating with 4165 resistance and 4115 support, as well as range expansion and complex trading patterns. The big picture context is a 1.5-month-long "megaphone" pattern, while the shorter term shows a smaller megaphone pattern with a 60% upside breakout bias. We also discussed the importance of level acceptance and not trading constantly in our trade recap. Plan for the Week Our focus this week is on navigating a tactical chop range between 4112 and 4181. The bull case for Monday is to defend 4129 and aim for 4145, 4158, and high 4170s. The bear case for Monday involves a loss of 4129 as the first warning, with a crack of 4112 for a real selloff. Expect tactical, trappy trading overall. Economic Events April Retail Sales: A potential downside surprise may affect rate pause and rate cut expectations. April Industrial Production: Expected to be flat; a higher-than-expected reading may support the Fed's hawkish stance. May Philadelphia Fed Manufacturing Survey: An above-expectations reading is seen as inflationary. Bonds Update 2-year Treasury yield at 4%, little changed 10-year Treasury yield advanced to 3.494% 30-year Treasury yield climbed 5.5 basis points to 3.831% Support Levels 4129-32, 4118 (major), 4112 (major - broadening formation support), 4106, 4099 (major), 4089, 4078-81 (major), 4061, 4040-4045 (major), 4031, 4017-20 (major), 4005, 3980-85 (major), 3967 (major), 3950-54, 3937 (major). Resistance Levels 4147, 4158 (major), 4172-75 (major), 4180, 4191 (major), 4205, 4212, 4217, 4227 (major), 4236 (major - broadening formation resistance), 4243, 4252, 4270-75 (major), 4286. 4158 as well as 4172-75 are decent zones to look for reactions as is 4191. Summary In summary, the market experienced consolidation and complex trading patterns last week. This week, our focus is on navigating the tactical chop range between 4112 and 4181, with both bull and bear case scenarios in play. Economic events, such as April Retail Sales and Industrial Production, may impact decisions on rate pauses and cuts. Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
CME_MINI:ES1!
by spytradingpro
$CVNA-Regular Divergence Indicates Potential Bearish OpportunityCarvana ( NYSE:CVNA ), the innovative online used car retailer, has recently shown signs of a regular bearish divergence on its chart, indicating a potential reversal in its current trend. With an identified entry, stop loss, and take profit points, we could be looking at a shorting opportunity here. Technical Indicators: The regular bearish divergence, circled in yellow on the chart, suggests a weakening in the current uptrend. This pattern is often a sign of a potential upcoming bearish phase, making it an opportunity for short sellers. Trade Setup: Here's a potential trading setup based on the current technical indicators: - Entry Price: 12.56 - Stop Loss: 13.70 - Take Profit 1: 10.77 - Take Profit 2: 9.13 This setup offers a good risk to reward ratio. The stop loss is set above the recent swing high, limiting potential losses if the price unexpectedly rises. The two take profit points allow for managing the trade more efficiently, taking some profit at the first target and letting the rest run if the price continues to move favorably. Options Play: For those interested in options, a Put option expiring on May 19th with a strike price of $10 could be a potential play. This would gain value if NYSE:CVNA stock price decreases, aligning with the bearish divergence. NYSE:CVNA current technical setup suggests a potential bearish opportunity. However, as always, it's essential to manage risk effectively and ensure the trade aligns with your overall trading strategy. *Note: This analysis is for informational purposes only. Always do your own research and consult with a professional advisor before making investment decisions.*
NYSE:CVNAShort
by TicksandWicks22