By Licia Leslie
August 12, 2024
Hi Shoppers,
The market was finally a bit tuckered out on Friday trading only a 58 point range.
I still think we may need to trade $5400 – $5440 before we take our next leg lower, if we do.
I do think Nvidia (TIcker: NVDA) is a buy here before their earnings report.
The chart is looking like a lot of charts after this pullback:
I think it will trade to $113.75 and possibly $119.50.
Implied volatility is still pumped up after that move on Monday.
Usually the IV trades up to around 50 before earnings and Friday it was still trading just under 62.
So straight out calls or a call vertical isn’t going to cut it if the IV collapses.
So we need to trade a call butterfly.
I like the Aug23 because it is before earnings:
I like the 106/114/121 call fly for around $1.80 or less.
That is buying 1 106 call, selling 2 114 calls, and buying 1 121 call paying less than $1.80.
Now remember, your fly is most valuable when the stock trades at your short strike.
In this case that is $114. Use a stop loss if it trades down 30%.
Trade Review
Baxter International (Ticker: BAX) hasn’t popped yet but it still looks like it is going to.
Thanks for Reading … See You Next Tuesday,
Licia Leslie
Licia Leslie
Head of Technical Analysis
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