To The Moon

Hello, everyone!

This week, PDD is set to release its earnings report before the market opens on November 21 (ET), while NVDA will announce its results after the market closes on November 20 (ET).

In other words, both giants will report their earnings on November 21 (Beijing Time). With the Nasdaq recently breaking record highs, these reports will be pivotal: one representing the trajectory of U.S. tech stocks, and the other reflecting the performance of Chinese internet companies. Together, they are poised to create waves in this week’s market trends.

Data source: Tiger Broker app

However, the trajectories of NVDA and PDD couldn’t be more different. PDD’s pre-earnings performance has been notably bearish, experiencing a continuous downward trend for over a month since October 4. It seems as though the stock is gathering momentum ahead of its earnings release.

Data source: Tiger Broker app

Now, let’s take a look at NVDA.

Data source: Tiger Broker app

Short-Term Trend Analysis

• Relatively Strong Bearish Trend

• Key Signals:

  • 2024-11-15: MACD and Fast Stochastic Oscillator indicated short-term bearish signals.

  • 2024-11-18: Slow Stochastic Oscillator and Williams %R both showed bearish trends.

  • 2024-11-13: Bearish engulfing pattern appeared.

  • 2024-11-15: Price crossed below the moving average, suggesting potential short-term downside.

Although NVDA hasn’t experienced the prolonged decline seen with PDD, its stock price has also pulled back in the past week, moving from the 5-day moving average closer to the 20-day moving average. Based on the principles of "dip before a rise, rise before a dip, or suppress before an uptrend," U.S. earnings releases often follow these patterns:

1. Stocks with strong earnings tend to drop sharply before the report, leaving room for post-earnings gains.

2. Stocks with weaker earnings often rally ahead of the report, setting the stage for a post-earnings decline.

Considering these trends, both NVDA and PDD appear to have a higher likelihood of a bullish post-earnings reaction.

Even if we speculate on bullish outcomes, risk management is essential. One approach could be selecting a safe, low-strike price for a sell put to bet on an IV crush. However, selling puts carries higher risk. Alternatively, structured products like FCNs (Fixed Coupon Notes) offer a more balanced risk-reward profile. Here are the current FCN quotes for both stocks:

Currently, both NVDA and PDD are offering an annualized coupon rate of approximately 17%. Based on their current stock prices:

• NVDA’s strike price is around $112,

• PDD’s strike price is approximately $99.45.

Although these levels are still slightly above their previous support zones, in my personal view, these prices represent reasonable entry points. Even if the shares are assigned, it would be challenging to get stuck with these stocks at such cost levels for the long term.

That’s all for this week’s Yield Hunting sharing! For those interested in FCNs, feel free to click Yield Hunting to request quotes and place orders.

Data source: Tiger Broker app

Notes： FCNs are available for Accredited Investors only.

Not financial advice. Investment involves risk. The price of investment instruments can and do fluctuate, and any individual instrument may experience upward or downward movements, and under certain circumstances may even become valueless. Past performance is not a guarantee of future results.

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