DTT Buzz
Exclusive Market Analysis, Alerts and Commentary from the DaytradeTeam trading staff
Tuesday, May 06, 2008
Pre- Earnings Analysis on NVIDIA Corp. (NASDAQ: NVDA)
NVIDIA Corp. (NASDAQ: NVDA) is scheduled to report earnings after the market close on May 8th. Playing a stock pre-earnings based on a technical set up is not highly recommended, but a strong technical set up going into earnings should not be ignored in my opinion
As you can see, NVDA broke out of a 4 month downtrend after creating a double bottom reversal pattern. The base of the double bottom resides at 17.50, while the neckline resistance resides at 21.00. Therefore, the height of the pattern is 3.50 (21.00 - 17.50). NVDA recently broke through neckline resistance at 21.00 with strong volume backing the action. Previous resistance at 21.00 should now act as support.
With that in mind, let's take a look at the 6 month chart in NVDA...
As you can see, NVDA broke out of a 4 month downtrend after creating a double bottom reversal pattern. The base of the double bottom resides at 17.50, while the neckline resistance resides at 21.00. Therefore, the height of the pattern is 3.50 (21.00 - 17.50). NVDA recently broke through neckline resistance at 21.00 with strong volume backing the action. Previous resistance at 21.00 should now act as support.
Now that the breakout has occurred, we can measure the move by adding 3.50 to 21.00. This indicates a move to 24.50 in NVDA. I like this stock long from here, and would be willing to hold through earnings if the 24.50 target has not been reached before the earnings release.
Happy Trading,
Nick Fenton
Sr. Trade Analyst
Nick Fenton says...
Best of luck Kevin! Like I said in the blog, it's a high risk situation any time you enter a pre-earnings position based on technicals, but I like this set up a lot. Let's hope we both make some money.
1:55 PM
Syndicate Site
Bought call options Sept 27.50 for NVDA two days ago...hope you're right! 1:30 PM