Trading Strategies For Nvidia Stock Before And After Q4 Earnings

NVIDIA Corporation NVDA was trading slightly higher Wednesday as the company heads into its fourth-quarter 2023 earnings print after the close.

When Nvidia printed mixed third-quarter earnings on Nov. 16, the stock closed 1% lower the following day but eventually continued in its uptrend and topped out at the $187.90 mark on Dec 13, 2022. The stock then fell into a downtrend but staged a massive reversal starting on Jan. 6, which caused the stock to soar 64% to reach a high of $230.49 on Feb. 13.

For the third quarter, Nvidia reported earnings per share of 58 cents on revenues of $5.93 billion, compared to a consensus estimate of EPS of 69 cents on revenues of $5.77 billion.

Read another analyst's outlook here.

For the fourth quarter, analysts, on average, estimate Nvidia will report earnings per share of 81 cents on revenues of more than $6 billion. Traders and investors will also be paying attention to how Nvidia guides its earnings for the next quarter and whether it sees an impending improvement in the supply chain.

Ahead of the print, Piper Sandler analyst Harsh Kumar maintained and Overweight rating on Nvidia and raised the price target from $200 to $225...

From a technical analysis perspective, Nvidia’s stock looks neutral heading into the event.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Nvidia Chart: Nvidia rebounded into a strong uptrend on Dec. 28 and on Jan. 23, the stock burst up through the 200-day simple moving average. On Tuesday, Nvidia negated the uptrend by printing a lower low, however, under the Feb. 10 higher low of $208.11.

• If Nvidia receives a positive reaction to its earnings print and surges higher to rise above the most recent high of $230.49, which was printed on Feb. 14, the uptrend may continue and Tuesday and Wednesday’s lower prices may serve as a bear trap. If the stock suffers a negative reaction to its earnings print and falls lower on Thursday, the stock may find support at the 50-day SMA.
• On Wednesday, Nvidia was working to print a doji candlestick, which could indicate the temporary bottom is in and the stock will trade higher on Thursday. The stock is printing the candlestick on the 21-day exponential moving average (EMA), which is bullish.
• If Nvidia loses support at the 21-day EMA and trades under the area for a period of time, the eight-day EMA will cross below the 21-day, which would be bearish.
• Nvidia has resistance above at $230.43 and $252.59 and support below at $195.55 and $187.80.

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