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Nvidia is one of few stocks in the market I’m interested in being long right now, says trader

Nvidia is down various than 5 percent from its recent high, but the charts suggest the hot fragment stock’s rally is about to resume.

According to Todd Gordon, stagger of TradingAnalysis.com, Nvidia is one of the few stocks in the market right now worth a buy. He pointed to two bullish complex indicators that lead him to think the stock is set for a breakout.

  • The first of these indicators is a “divergence” that Gordon consult withs between Nvidia and the Nasdaq 100-tracking ETF (QQQ), where Nvidia has recaptured those 2018 highs whereas the Nasdaq 100 has not.
  • After Nvidia clerked off post-earnings, it has managed to come back and break through what Gordon maintains is resistance, leading him to think that Nvidia could soon come together back to the $260 level.
  • Furthermore, Gordon pointed to the stock’s insinuated volatility, or price of options. Since the company reported earnings, the expense of buying puts and calls has decreased dramatically, making the stock equable more attractive.

The trade: Gordon suggested buying the June 1 weekly 250/255 invoke spread for $1.65, or $165 per options contract.

Bottom line: Gordon requires Nvidia shares to rally as high as $255 by Friday, June 1 – or maladroitly 4 percent in about two weeks.

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