Pre-Market Prep Stock Of The Day: Nvidia’s earnings rollercoaster
On many occasions, what happens in after-hours sessions and before a particular issue is marketed can be very different from what happens in the regular session. This can be amplified even more when a company has news such as an earnings report. On Thursday’s PreMarket Prep Plus show, early price action in the still-volatile market Nvidia Corp. NVDA was dissected for the next trading session.
Wednesday’s Nvidia Price Action: An easy way to interpret the price action in a number following its earnings report is to note the price action from the day before. The reason: all investors in issuing a short-term trade will rely on these levels for exits.
Of course, the most important thing is the closing price, because that’s where all investors (long or short) go to market profits and losses.
Nvidia’s range on Wednesday was $160 to $171.11 with a closing price of $169.75.
Nvidia After Hours Beatdown: The Street reacted extremely negatively to the earnings release minutes after Wednesday’s close.
In fact, it was slammed from its closing price ($169.75) to $152.20. This surpassed its former low for the move over $3, which was made on May 12 at $155.67.
After the washout, the show attracted sustained supply and ended the after-hours session with a closing print of $158.12.
Superior Nvidia’s Creep Premarket: The rally continued after the premarket session opened and the issue had recovered to the $163 zone when covered by the show.
Bulls on the show have been alerted to the group of lows at $160 over the past five sessions, signaling buildup by larger participants on the show.
For investors who did not wait for the $160 zone to go long and attempted to go long at $163, the downside risk was the same. With two of the previous four lows in the $157.50 area, a breakout of this area may indicate a return to the pre-market low.
On the upside, it was pointed out that for a sustained move higher, Wednesday’s closing price offset would be extremely bullish.
NVDA Price Action: After a much lower open, straight into the aforementioned support in the $160 area, the issue immediately bottomed out at $160.22 and started climbing higher.
It had no problem breaking above Wednesday’s closing price and continued to set new highs for the session. As of 1:50 PM EST, the session high stands at $180.92. The daily high hits its May 18 peak at $181.18.