Description NVDA has seen consistent gains following the upside break of its descending intermediate trendline on 17JAN. Now it seems to have settled into a consolidation pattern (Ascending Triangle) following the event-related runaway gap up through an ATH on 25May. Ascending triangles represent a healthy demand for a stock with a planned distribution at a particular price, which appears to be 480, and now we are now seeing the second rejection of the upper boundary of the pattern @482.
At the same time, DIA, SPY and IXIC have all seen retests and rejections of their 50D EMAs today. In general, I expect the continued fall in the indexes to keep NVDA in consolidation, despite consistent earnings outperformance.
Technical Indicators to signal the entry: Ascending Wedge upper boundary second rejection.
Technical Risk Factors: MACD 12 over 26 bullish cross
The expected price is <482 until breakout of the pattern.
I will be using short dated call credit spreads to: Limit upside risk while maintaining a neutral position take advantage of skewed earnings IV
Call Credit Spread Levels on Chart SL: 482 / or a minor that does not reach the ascending trendline at the bottom of the pattern PT: <482 TP: @ expirations *Stops based off underlying stock price, not mark to market loss
The Trade BUY 8/25 487.5C SELL 8/25 482.5C
R/R & Breakevens vary on fill.
Manage Risk Only invest what you are willing to lose I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors.
Trade active
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Filled 8/22 @ 1.7 Credit
Trade closed: target reached
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Bit of late update, but my 8/25's expired full credit. I am revising my chart picture into a channel.