Trade Alert: Time to Profit From Nvidia

I have a new trade alert for you today, so let’s get right to it.

After the closing bell yesterday, Nvidia Corporation (Nasdaq: NVDA), which designs graphics-processing units, reported first-quarter earnings that topped analysts’ expectations. With an improved outlook as well, investors poured into the stock.

Shares surged over 10% before the stock opened this morning — and that triggered a new trade for us.

Based on our historical research, we know we can grab call options now and hold them for about two months.

This drift seems to happen often, and each time Nvidia delivers.

See, during our extensive research since 2006, we saw the stock rise 10 times as a result of this earnings trend. It climbed anywhere from a modest 2.6% to more than 30%. And only twice could there have been a loss when using options — it depends on whether or not our 75% stop would have been hit. At some point during this period, all 10 examples were in positive territory.

So our options would’ve had the chance at some nice profits every single time.

We also followed call options in this trend seven times during our backtest, with only one instance ending in a loss. The other six times saw gains from 30% to more than 300% — so I’m excited about our trade today.

In fact, Nvidia has also appeared in our beta test, and it handed us a 50% overall gain in November in less than a month.

So let’s grab the July 21, 2017 $115 call options to benefit from this drift.

Here’s your action to take:

Action to Take
Buy Action to Take
Stock: Nvidia Corporation (NVDA)
Option Type: Call Option
Expiration: Jul-21-2017
Strike Price: $115
Option Symbol: NVDA170721C00115000
Action: Buy to Open
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: $8
Trade Deadline: If your order is not filled by my next update, I will update you on the trade.
Note: Do not place a market order. Set the limit order at $8.
Once this order is filled, place the following order:
Sell Action to Take
Stock: Nvidia Corporation (NVDA)
Option Type: Call Option
Expiration: Jul-21-2017
Strike Price: $115
Option Symbol: NVDA170721C00115000
Action: Sell to Close Half
Order Type: Limit Order
Duration: GTC (Good ‘Til Canceled)
Limit Price: Whatever nets you a 50% gain.
Trade Deadline: Keep this order open until it is filled or canceled.
Note: This second order will allow us to collect a 50% gain on half of our position in the event that a quick move happens before I can get a trade alert out to you.

Trade Recap on Endo

Before I sign off, a quick update on yesterday’s trade.

We grabbed the June 16, 2017 $12.50 call options on Endo International (Nasdaq: ENDP). I set a limit price of $1.20, meaning we didn’t want to pay more than that for the option, and the price stayed below that level throughout the day.

Our official entry price is $0.95.

If your orders haven’t been filled yet, keep them open and they should be filled today.

That’s all for now.

I’ll monitor all of our positions and alert you immediately when it’s time to take action. There are still several more possible trades this week and in the coming weeks, so keep an eye on your inbox for our next trade alert.

Regards,

Chad Shoop, CMT
Editor, Earnings Drift Alert