NVIDIA Forms Bullish Reversal
November 21, 2011 3:01 PM
Shares of NVIDIA (NASDAQ: NVDA) are trading higher on the session by 2.17%, at $14.23. The stock has been drifting lower over the past six weeks after forming what looks to be a double-top around $16.00.
While shares of NVIDIA are now trading below the 20-day and 50-day moving averages, they may have just established a support level at $13.50 (would also be a double-bottom if it holds). Shares opened lower and pushed to a session low of $13.50 before rallying strongly into the green.
The cherry on top of today's move is that, if shares can close above $14.14, a bullish engulfing candle will be formed.
Given the clearly established near-term support and resistance levels, traders should look to play the range. Getting long here with a tight stop and an eye to exit around $15.50 is smart play; putting out shorts with a tight stop near $16.00 would also be a good play if the situation presented itself.
More advanced traders can look to implement a delta-neutral strategy here as well.
NVIDIA Corporation is a provider of visual computing technologies and the inventor of the graphics processing unit. Visual computing is available on devices ranging from tablets and smart phones to notebooks and workstations.
