NVDA is presenting a note worthy setup here. It recently pushed...

NVDA is presenting a note worthy setup here. It recently pushed through 200 day simple moving average (SMA is blue line), which catapulted it through a slightly down sloping resistance at the 16 area (yellow line) .

We were long via Covered Calls position, but exited for a small profit prior to earnings. The post earnings price action took NVDA back to a 200 day SMA resistance turned support test (white oval), which it passed with flying colors. Now NVDA is sitting on that down sloping level of interest, which is currently acting as support.

To trade this seeminly bullish setup, we may re-enter a Covered Calls position in NVDA. The only downside to selling premium in NVDA is the low implied volatility levels, but it's still worth it in our opinion. You could sell Naked Puts here as an alternative, but low IV comes into play again. We prefer 2x historical IV or better when selling Naked Puts. A bull vertical is fine, but we'd be looking at buying the around the money call spread…again due to low IV.

Just food for thought. Let us know your preferred strategy if you have time.

Market News and Data brought to you by Benzinga APIs

To add Benzinga News as your preferred source on Google, click here.