I am BULLISH on $NVIDIA Corp(NVDA)$ at these levels for the time being.
Here's a look at the daily chart of the stock:
The stock closed above its 50DMA and 100DMA, which are incidentally above the gap it formed from November. The stock also painted a doji candle on the daily, which suggests indecision on the part of sellers and buyers. It is also an indicator of a potential reversal in the near-term trend. I now expect the stock to retest its near-term 5DMA at 159, which represents a 7-point upside from current levels.
Here's a look at the Bollinger Bands on the stock:
The stock is on the lower Bollinger Band, which supports the likelihood of a bounce at these levels. Contracting BBs also suggest a strong directional move is coming. Given that we are heading into a seasonally positive return time of the year, I expect the stock to move along with the broader market and head higher.
So, how do we trade this? I would get CALLS (155C or 157.5C) expiring in a few weeks, and hedge with a smaller position of PUTS (155P or 152.5P) in the event that the stock breaks below the 50DMA and 100DMA and try to fill the gap created to the upside. Good luck everyone!
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