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Swing Trade Idea (NVDA) – June 27, 2024

Our bearish trade for Thursday, June 27th is NVIDIA Corporation (NVDA). NVDA is part of the Technology Sector, which traded into the top of an uptrend channel and performed at 5.13% over the last month. NVDA overperformed relative to its sector over the last month at 18.72%.

NVDA has experienced a strong rally over the last month as it traded from $75 to $140. It has finally run out of steam and is considered to be extremely overbought. We are therefore playing a bearish Credit Spread that will generate a Premium of over 35% of the Width.

As a close, if NVDA were to trade above $130 for multiple days, this would invalidate our analysis and we will consider cutting losses on the trade. We will also consider cutting losses on this options trade if the value of the vertical spread moves above $9.68.