What Nvidia Stock Looks Like To Print First Quarter Earnings
NVIDIA Corporation NVDA It is due to print its first-quarter financial results after the market closes on Wednesday.
When the semiconductor company printed its fourth-quarter results on February 16, the stock was down 6% to start the next trading day, but closed that session 13% higher from the opening.
In the fourth quarter, Nvidia was a huge success, reporting non-GAAP earnings of $1.32 on revenue of $7.64 billion, beating consensus estimates of $1.22 per share and revenue of $7.42 billion.
In the first quarter, analysts estimate that Nvidia will report earnings of $1.29 per share on revenue of $8.12 billion.
This month, seven analysts have budgeted with adjusted price targets, with all but one lowering their targets to between $190 and $300. Morgan Stanley It reclassified the Equal Weight and announced a target price of $217.
The reaction that Nvidia receives after earnings is likely to be the deciding factor as to whether the stock will trade in bullish or bearish territory for the time being, because although Nvidia has formed a bullish double bottom pattern, the stock is holding in a downtrend. by a descending trend line.
Of course, holding stocks or options during earnings printing is like gambling because stocks can react upwards to losing earnings and declining earnings. Options traders, especially those with dated calls or sells, incur additional risk because intuition when writing options increases premiums to account for implied volatility.
The implied movement for Nvidia options expiring this week is 10.80%.
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Nvidia chart: Nvidia was trading up more than 5% heading to print its earnings, in reaction to the bullish double bottom the stock hit at $157.55 on May 20 and Tuesday. If Nvidia receives a bullish reaction on Thursday, the stock will break out a bearish downtrend line that has been keeping Nvidia lower since April 20th.
- If Nvidia suffers a bearish reaction to its earnings, the double bottom pattern will be invalidated and the descending trend line is likely to push the stock lower in its downtrend. The latest lower high was printed on May 17th at $183.17 and Nvidia will have to either rise above this level or correct to record a higher low in order to invalidate the downtrend.
- Nvidia has developed an exaggerated bullish divergence on the daily chart, indicating that the most likely scenario is for the stock to move higher over the coming days. An exaggerated bullish divergence occurs when the bottoms of the stock are flat, but the RSI forms a series of higher dips.
- Nvidia has higher resistance at $180.73 and $187.80 and support below at $161.37 and $145.75.
SEE ALSO: ‘It’s Never Been Cheap Before’: Why Pete Najarian Bought Nvidia Stock Before Earnings