Nvidia (NVDA) is up about 17% over the past year, but that lags the S&P 500 (SPX), the XLK tech sector ETF, and the SMH semiconductor ETF. Right now NVDA moves almost in lockstep with the S&P 500 - their correlation is close to 1, meaning they go up and down together in the same direction.
Even though NVDA has been the biggest market story for a long time because of its role in AI, it is the laggard among the CPU and GPU makers. Broadcom (AVGO), AMD (AMD), Marvell (MRVL), and especially Intel (INTC) have all outpaced it.
Key price levels
The top to beat is the high at 236.54 - the high water mark. From there a trend line points down. A steeper trend line pointing up has been broken. The stock now sits inside a tight, narrow, down-sloping channel between two lines.
Levels to watch:
- Near 216: a series of lows that were broken, now possible resistance.
- Near 212: repeated highs, now possible support.
- Near 207: relative lows.
- Near 190: lows lower down; a small gap here turned into a double bottom.
- Near 225: a gap to the upside.
- Near 232: a relative high.
Moving averages, RSI, and volume
The 5-day EMA (exponential moving average) came in at 214.16 as of yesterday's close and has crossed below the 21-day EMA. The 21-day EMA stands for one trading month, the 5-day for one week; both line up around 214, another level to watch.
RSI has been sliding and now sits just below the 50 midline. That drop before earnings is common, so it does not carry much weight here.
The volume profile shows a node between about 206 and 212, and another near 200.
The trade example
The expected move for this week's expiration is plus or minus about 5.9%. The example trade runs longer, to December 18, where the expected move is plus or minus 19.4%.
The trade: a December 18 215/240/255 call butterfly for a 570 debit. The 570 paid is the max loss. Max profit, at the short strikes, would be $1,930. Break even is 220.70, about 3.6% above current price - well inside the expected range. It is a longer-term bet on continued upside in NVDA.
