Trading Strategies For Nvidia Stock Before And After Q1 Earnings

NVIDIA Corporation NVDA was trading lower Wednesday as the company heads into its first-quarter 2024 earnings print after the close.

When Nvidia printed a fourth-quarter earnings beat on Feb. 22, the stock surged over 14% the following day and continued in a fairly consistent uptrend until topping out at the $318.28 mark on May 18, where the stock started to consolidate.

For the fourth quarter, Nvidia reported earnings per share of 88 cents on revenues of $6.051 billion, missing a consensus estimate of EPS of 81 cents on revenues of $6.01 billion.

For the first quarter, analysts, on average, estimate Nvidia will report earnings per share of 92 cents on revenues of $6.52 billion. Traders and investors will also be paying attention to how Nvidia guides its earnings for the next quarter and how it plans to harness opportunities in AI.

Ahead of the print, Citigroup analyst Atif Malik maintained a Buy rating on Nvidia and raised the price target from $305 to $363. Analysts from Stifel, Wedbush and Keybanc also weighed in on the stock, raising their price targets to a range  between $290 and $375.

From a technical analysis perspective, Nvidia’s stock looks neutral heading into the event.

It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

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The Nvidia Chart: Nvidia negated a possible bull flag on Wednesday by falling under the eight-day exponential moving average, but the stock continues to trade in a confirmed uptrend. The most recent higher high within the trend was printed on May 18 at $318.28 and the most recent confirmed higher low was formed at the $280.46 mark on May 12.

• If Nvidia receives a positive reaction to its earnings print, Wednesday’s low-of-day may become the next higher low within the uptrend. If that happens, bullish traders want to see the stock rise above $319 to confirm the trend remains intact, which could propel the stock to a new all-time high.
• If Nvidia suffers a bearish reaction, bullish traders want to see the stock drop under the 50-day simple moving average, which could accelerate a move lower. If Nvidia falls but holds above the 50-day SMA, bullish traders can watch for the stock to form a possible bullish reversal candlestick at that level.
• Nvidia has resistance above at $314 and $332.19 and support below at $288 and $272.29.

Photo courtesy of Nvidia.