27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
NVIDIA Corporation (NASDAQ:NVDA), a hot stock since at least 2016, is now down 6 percent over the past five trading sessions and opened at $229.58 on Wednesday. Investors are naturally evaluating the near-term weakness and questioning whether Nvidia is a buying opportunity at current levels.
The Analyst
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Miller Tabak's Matt Maley was a guest on CNBC's "Trading Nation" on Tuesday.
The Thesis
Nvidia's stock has gained around 500 percent since 2016 and soared 27 percent in January alone, Maley said. But taking a step back might provide some explanation for the decline, as the stock has reached a premium of over 250 percent to its 200-week moving average. Investors could conclude the stock has become "ridiculously overbought," but for it to become attractive again for investors, it needs to pull back close to the $200 level — which would imply an approximately 9-percent decline, Maley said.
At around $204 per share, the stock would trade back to its 100-day moving average, which has historically served as a "great support" level, Maley said. At least from a technical point of view, this would be a good entry point for investors looking to buy or add to their position, he said.
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But even if Nvidia's stock falls 20 percent from current levels, it would be seen as a move that is "nothing" compared to the massive triple-digit gain over the past two years, the analyst said.
Price Action
Shares of Nvidia were trading higher by 3.61 percent at $233.73 late Wednesday morning.
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"Destiny 2" screenshot courtesy of Nvidia.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.