NVIDIA STOCK EARNINGS MASSIVE MOVE? (NVDA STOCK) | TECHNICAL ANALYSIS

hey what's going on YouTube Welcome Back to Tech conversations firstly if you haven't already make sure to check out the Discord I'll put a link to it in the description below also make sure to check out Mumu right now you could earn an 8.1% API on your uninvested cash by using my link in the description below terms and conditions do apply you can also get up to 15 free stocks so go ahead and check out Mumu I'll put a link to them in the description below now let's get right into today's video so today I want to talk about Nvidia stock earnings coming up and what I am currently seeing so firstly when does Nvidia have earnings so if we head back to the Discord here I do post the most anticipated earnings for the following week every single week on here in the earnings calendar channel so let's take a look here at the most anticipated earnings for next week where is NVIDIA Nvidia is right here under Wednesday so Nvidia will announce earnings on Wednesday and then below that we can see that it's under the after close column so that means Nvidia will announce earnings on Wednesday after the market closes so we're very close to earnings for NVIDIA so the first thing that I like to do so I like to find what the earnings apply to move or earnings expect the move is in other words how much are investors expecting Nvidia stock to move for earnings so we find this by taking a look at how much the at the money straddle will cost and multiplying that by 0.85 and we want to use the first expiration date for the options that comes after the earnings date so let's go into the options remember a straddle is an option strategy where we buy a call we buy a put they both have the same strike price they both have the same expiration date with the at the money straddle we're specifically using the at the money call and the at the money put so remember for the expiration date we want to select the first expiration date that comes after the earnings date that would be August 30 so we don't need to change that and then let's first start by taking a look at how much the at the money call costs so remember the at the money call is going to be the call option whose strike price is as close to the current share price as possible so which call option is that that's going to be the one at the 129 strike so this is the at the money call so again what we care about is how much does it cost cost 735 and then we also want to see how much the at the money put cost with the same expiration so again for the at the money put it's going to be the same thing the at the money put is the put whose strike price is as close to the current share price as possible so it's also going to be the put at the 129 strike so this is the at the money put how much does it cost $6.95 so how much will you have to pay for both of these around 1430 that's how much this at the money straddle would cost for NVIDIA right now with the expiration date of August 30 now if we multiply that by 0.85 we get around around 1215 so in other words investors are expecting Nvidia share price to move up or down about $12.5 or if we divide that by the current share price we get about 99.4% so in other words investors are expecting Nvidia share price to move up or down about 99.4% this is just an estimate and it could definitely still change as we approach earnings earnings is Wednesday after the market closes now we can compare this to other websites like for example Market chameleon to see uh you know what the predicted move has been in the past so for example with Market chameleon in the last 12 quarters the predicted move after the earnings announcement was plus or minus 7.8% we got plus or minus 99.4% so what that tells me is that the implied move is quite a bit higher than it's been on average and to me that makes sense because there are very high expectations for NVIDIA right now and then if we take a look here the average of the actual earnings move has been 8.1% plus or minus 88.1% so on average it's tended to move around what the actual implied move is right so if we got plus or minus 99.4% you know honestly a good estimate for me would be maybe plus or minus 10% I could see Nvidia moving for earnings again this is just an estimate now the other thing I want to mention is I think playing earnings is a complete gamble uh but I think a lot of people still do it and if you're doing it you should at least be aware of IV Crush so when you're buying calls you're buying puts and implied volatility drops that is not good for you and with earnings what we tend to see is IV rise as we get closer to earnings and then after earnings IV tends to drop a lot and so again if you're buying calls you're buying puts and you're holding through earnings that could really affect you so let me show you a quick example of this so here we are on option Strat I'll put a link to option Strat in the description below really great options visualization tool so let's say you wanted to buy three calls uh on Nvidia uh with the expiration of August 30 and you want it to hold through earnings again which is Wednesday and if you have the premium version of option Strat it actually tells you here uh when the earnings date is as well as what your chance of profit is according to option Strat but anyways if we take a look here right we can see that let's say you came in here and you said okay I'm going to hold their earnings on Wednesday let's say I'm holding until Thursday and if you look at this you might say well look if Nvidia is at 138 on Thursday uh according to this should make about $140 but what you again may not take into account is that IV might drop quite a bit that might affect your actual earnings here so let's say implied volatility goes from 98% to like 60% take a look at what might happen here so I'm going to slide this down to 60% and so now if we take a look where you thought you were going to make some nice money you might actually wake up and see that you're actually down $150 for example so that's why you need to be very careful when you're buying options and with IV Crush now let's head on over to trading view here so I'll also put a link to trading view in the description below really great charting tool we're looking at Nvidia and I am on the daily chart right now so a couple of things here uh when it comes to the chart for NVIDIA so the first thing I want to bring up is a premium indicator that I like to use this is the Lux algo signals and overlays premium indicator I'll put a link in the description below to these premium indicators as well as to a video I made where I explain this more in depth but just a couple of things I see with this indicator here very quickly so if I take a look here right I see this green square here with a triangle inside so this is known as a regular uptrend confirmation signal right sometimes when you see this Plus these are kind of uh you know they're they're more uh Stronger indicators these are just kind of regular indicators right but potentially telling us hey on this date here you know Lu salago this this this indicator here is signaling hey we might be changing into an uptrend here and it did make a nice move after that right it has made a nice little move to the upside here right prior to that we had this downtrend confirmation signal Here regular downtrend confirmation and we also saw a nice little down right so that's how you could potentially use these of course none of this will always be accurate but you know if you combine this with other analysis it could be very useful now what other things do we see here well for one price is back above the smart Trail and also we haven't actually seen any takeprofit signals but this indicator does come with that as well so you'll see these like X's here this is potentially a takeprofit signal where you might potentially want to take profit again we haven't seen anything like that recently but this indicator does come with that as well it also comes with reversal zones right so it's going to be this Red Cloud and this green Cloud down here so these zones might be areas where you know you might start seeing some support some resistance some reversals you can actually see here right recently we you know Nvidia actually touched this lower reversal Zone and it actually as you can see right was was a great area of uh support here and we've actually seen a nice reversal since then so that's how you could potentially use this indicator again you don't want to use any of this alone you want to combine it with other forms of analysis and it could again be very useful now a couple of other things here so notice I already have some trend lines drawn on here so this was kind of a longer these are some longer term trend lines on Nvidia right so how did we draw this so you know Nvidia was making a higher lows higher highs higher lows higher highs right and so basically we combined some of these higher lows and higher highs we drew these trend lines so I drew this one then I cloned it and you know we have two parallel trend lines here so this you know prior to this mess up here you know we were in an uh ascending Channel chart pattern here which is a bullish chart pattern eventually what happened it actually broke out to the upside here you can see here right we broke out of this channel right so that would have been a potentially good signal there that you know we might be heading a lot higher which Nvidia did in this situation here and now since this peak though right which was looks like June 20 of this year what have we seen with Nvidia Nvidia has been making um lower lows lower highs lower lows potentially a new lower high we'll see what happens but now what we can do here is we can actually draw a new trend line right which is going to be more recently here so we have one touch there one touch here and multiple touches there right so something like that right there right so now we have this new trend line now this trend Line's been acting as an area of resistance here right cannot break through there and so again what I can do here I can clone this and I can drag this down and draw you know a parallel trend line so I'd probably draw this one here right so you know multiple touches here this one candle here was pretty insane right uh but it still closed above this trend line as you can see here and then we had a couple more touches here so down here we kind of see some support here so now it's kind of trading between this channel here but more importantly right you can see here now basically 5 days straight it's been trying to break through this trend line which is now an area of resistance and it just has not been able to so this is a key area to watch right and again with earnings anything can happen here but with earnings you know if they have great earnings you know if it breaks through here can definitely go back up to this upper trend line right of this previous ascending Channel but if it you know if it has bad earnings then it could definitely retrace back pull back to the lower trend line here right but this is a key area to watch here there's a lot of resistance again five straight days it tried to break through there it could not so we'll see what happens with earnings let me know what you think will happen if you have any questions fre to leave them in the comment section below check out the Discord a link to that in the description below hope you enjoyed the video let me know what you guys think I will see you guys next time