Trading Strategies For Nvidia Stock Before And After Q2 Earnings

NVIDIA Corporation NVDA was popping up about 2.5% on Wednesday ahead of the company’s second-quarter earnings print, set to be released after the market closes.

When Nvidia printed a first-quarter earnings beat on May 24, the stock surged over 24.09% the following day and continued in a fairly consistent uptrend until topping out at the $480.88 mark on July 14, where the stock started to consolidate sideways before reaching a new all-time high of $481.87 on Tuesday.

For the first quarter, Nvidia reported earnings per share of $1.09 on revenues of $7.19 billion, exceeding a consensus estimate of EPS of 92 cents on revenues of $6.52 billion.

For the second quarter, analysts, on average, estimate Nvidia will report earnings per share of $2.09 on revenues of $11.22 billion. Traders and investors will also be paying attention to how Nvidia guides its earnings for the next quarter and how it plans to continue harnessing opportunities in its AI applications.

Ahead of the print, BMO Capital analyst Ambrish Srivastava maintained an Outperform rating on Nvidia and raised a price target from $450 to $550. Analysts from Keybanc and HSBC also weighed in on the stock, raising their price targets to $620 and $780, respectively.

From a technical analysis perspective, Nvidia looks bullish heading into the event, unless the bearish double-top pattern is at the all-time high plays out.

Bearish On Nvidia? Short-term traders looking to hedge a long position, play the dips within a potential continued uptrend or those who believe Nvidia will suffer a bearish reaction to its earnings print, can play retracements using the AXS 1.25x NVDA Bear Daily ETF NVDS.

NVDS is a leveraged ETF aiming to track 125% of the opposite daily performance of NVDA. This leverage boosts trade performance, potentially turning small, brief dips in Nvidia’s stock into significant gains for traders. Using this ETF eliminates the need to borrow NVDA stock from your broker to sell short, offering retail traders an easy and convenient way to play Nvidia bearishly.

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. Additionally, NVDS is meant for short-term traders who actively manage their investments and the ETF is not intended to be held for longer than one day.

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The Nvidia Chart: Nvidia rebounded into an uptrend on Aug. 14 and printed its most recent higher high at the all-time high of $481.87 on Tuesday and a higher low at the $416.60 mark on Friday. On Wednesday, Nivida was working to print a hammer candlestick, which could indicate higher prices will come on Thursday.

• If Nvidia receives a bullish reaction to its earnings print, Wednesday’s low-of-day will serve as the higher low within the uptrend. If Nvidia reaches a new all-time high, a blue-sky run could be on the horizon, with no resistance above in the form of prior price history.
• If Nvidia suffers a bearish reaction to the news, a double top pattern that was formed on July 14 and Tuesday will play out, which could cause a significant retracement. If that happens, the gap that was created following the stock’s first-quarter earnings could be filled.
• Nvidia has resistance above at $481.87 and at the psychologically important $490 mark. The stock has support below at $429.90 and at $419.38.

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