Tackle Today: Nvidia Explodes
May 25, 2023
«Driven by AI»
Nvidia shares entered orbit last night after dazzling investors with an AI-driven earnings beat and jaw-dropping growth forecast. Shares are up 25% this morning, lifting the chip giant to a record high. The semiconductor ETF (SMH) and Nasdaq-100 (QQQ) are leaping higher in sympathy.
Given the size of the gap, it’s going to be challenging to initiate new bullish positions. There simply aren’t any reference points to build a trade around. Those wanting to play have a few options.
First: wait for a new pattern to develop. A pullback or pause in the coming days could create a bull retracement or breakout setup.
Second: use options to enhance your odds. Bull put spreads allow you to profit even if NVDA pauses or fills some of the gap.
Third: bull call spreads allow you to make an upside bet on the cheap.
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Chart of the Day: NVDA
Wow. Just wow!
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