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hey Traders and investors Serge Berger here today I want to show you guys a trade that looks to be setting up in Nvidia core protor nvda it's a good trading stock in case you didn't know first of all let's look at the multi-year chart here for a little bit of perspective and it sure does look like this stock wants to go back to where it was in 2007 somewhere near the high 30s uh maybe the $40 area that looks to be where this stock wants to push toward that is its all-time highs so if you look at this through a multi-year lens stock currently as I'm recording this uh just a little bit above uh the Midway Midway point of the $35 marks so 3570 or so and looks like it really does want to push up here in fact doesn't look a whole lot different to something like Microsoft which is also pushing slowly P trilly back to its previous all-time highs actually in this case back in the year 2008 near the $60 area so we got a couple stocks here that um among other stocks that are looking quite similar the only problem for something like Nvidia is that its slope here in the intermediate term has become unsustainably steep let's look at the daily chart give you guys a little perspective of what this looks like all right so first of all you can see we've had a real one two three move higher in this stock and we we held the 200 day moving average on that least on that latest uh sell off here down into the mid February lows but once again we are very very overbought here by just about any measure from a a momentum perspective and B also just basically very overbought above its 200 day moving average that's this red line okay now let me show you a very simple way of looking at this a little bit differently as well to give you a little bit more perspective okay also look how far this stock has been able to hold above its 21-day moving average ever since that those mid-February lows and what we can start doing is painting my favorite pattern is called a rising wedge pattern looks something like this in this stock Nvidia Okay now what's really important and we can overlay something like a macd like a real simple moving average convergence Divergence oscillator just to give you guys a bit of an idea of how severely overbought the stock is the problem with a stock like this when it's moving is you don't really want to go in and short the stock on its own unless we have a bearish confirmed reversal pattern this is something I've been discussing with clubhous members this trade setup and I'm going to uh go into more detail as we potentially get a setup here sooner um maybe over the coming days or so uh this company does have earnings coming up in not too distant future so I don't think shorting the stock here unless we have a confirmed bearish reversal is the smart thing to do but I do think the option Market is giving us some decent opportunities here uh if we look at implied volatility uh over here this is the level of implied volatility you can see we are fairly low in the 52 we range uh in fact if we if I I'm going to pull this up over here for you guys and I'll just read it to you the the implied volatility on Nvidia stock at the moment is uh in the 25th percentile of the 52- we range so in the lower quadrant so to speak uh of the 5502 range so implied vly is fairly cheap so there's several options one could do one could go on out and start buying some Smalls size protective puts um with a few months left to expiration or if one wants to do one could also start selling some out of the money call spreads the only problem with that is implied volatility is quite low so it's probably not so great to sell options when the implied volatility is fairly low so I think Nvidia has a a rate of changer that's very unsustainable I think buying some protective puts as a a starting strategy here to start betting against the stock here for a mean version move is a good strategy again it doesn't mean it can't go higher and we do have earnings coming out in the not to distant future if we get another push higher then I think one could go ahead and actually buy even more reports or at that point maybe implied vality spike a little bit and you could go and start some out- of the- money call spreads or something like that again many different strategies but I would caution against selling the stock here um shorting the stock I would caution against that unless we have a confirmed bearish reversal but I want to highlight this stock with you guys Nvidia very unsustainable rate of change I do think he's going to move lower probably back into the low3s uh at least through a multi uh multi-week maybe a multi-month lens or something like that so I hope this makes sense guys please like the video as I move up in the YouTube ranks subscribe to my channel and I'll see you guys in the next video
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