Sunday Night Weekly Recap AUG 25, 2024

It’s here, it’s finally here, 😁 this week is one of the Top 5 most anticipated earnings announcements that I can remember… NVDA... Tonight we are going to take a deep dive, I’m going to share some actual Options set-ups and look at a few stock charts.

Today the pastor at church mentioned me without saying my name. I didn’t know he was going to do that, and I certainly didn’t ever think so many people would recognize it. 9 different people in total asked me afterwards, 9, I was surprised… It’s not like I’m part of an organization for that, just a dude outside in his driveway….

What he spoke about was his old John Deere riding tractor / mower. He had it for 10 years, hit some stuff and bent the mower deck. Baddddd… I weld, and as I shared in Fridays post I inadvertently became “The fix it guy” of my neighborhood. Everyone thinks that because I weld that I can fix stuff, they’re right, but this one would be a “challenge” What this pastor needed was a blacksmith, not a welder. After heating the steel, then beating it with a 3lb hammer, and clamping it back down, doing that same process 57 times, yes 57 times over and over and over again, I was finally able to weld it. That my trader friends is “old skool blacksmithing 101”

Sound like the stock market lately? It does to me. Stocks got beat down, smacked down and plain plum pummeled. Then what? A few good days here and there, then on Friday we had “J-Pow” to the rescue saying the Fed would be cutting rates soon.

Heating, beating and bending the steel back into place is one thing. making sure it’s in the proper spot to weld is another. Then after we weld it the true test becomes after we put it all back together how does the tractor cut now? Is it shaky? Does it vibrate? Or are we all smooth and steady and ready to “Git er done”? Fortunately it was the latter in this case. That is where we are right NOW in the stock market. Stocks got back up to where they were, but will they hold?

With NVDA reporting earnings this week that will be a crucial aspect in that equation. Since we are speaking of NVDA lets start there then move on to a few new names for stocks to consider. First off there are NO Guarantees in the stock market or with Options trading. ( see the disclaimer below ) One way that they vary to the Options traders advantage is that stocks are only about possibilities where Options are about mathematical probabilities.

One thing one needs to be cognizant about if buying Options this late in the game before the announcement is the “Vol Crush” And no, Vol does not mean Volume here. “The Crush” as it’s known is real, I’ve experienced, it sucks, but all seasoned vets have. How does one enter NVDA with that concern this late in the game? Great question you ask, Vertical Spreads. They will offset each other. Or go Delta Neutral with ATM Straddles. There’s still some debate on that one, some believe to buy closest to EXP to capitalize on potential gains, we here at investingwithfaith.com prefer to go further out by 30 days just in case. Yes you will pay more for the Premium of the extension. But you can also drop which ever side it goes against and collect it back directly with the price movement. It comes down to personal preference.

A less intensive way would be to consider buying Bull Call Spreads ( if you are bullish ) With NVDA sitting at 129.45 you could consider buying the 130 and selling the 135. The strike date is up to you but we prefer 30-45 days to EXP. For traders with a greater risk appetite the 130/ 140 play may be worth looking at.

Currently the Calls on NVDA are still the heaviest for SEP 20, 2024 with over 144,000 contracts at the 130 strike and 98,000 on the 140’s. That’s a lot, considering that every strike in between is filled up as well that is a whole lot. Some of those are being sold, not all are being bought. It’s the pricing along with the ultra high liquidity that makes it so attractive.

If a trader was bearish he could consider flipping the Vert. He could consider selling the 120 put and buying the 130. For more conservative investors selling the 125 put would be more prudent.

We wouldn’t even consider continual income generation plays like Calendar Spreads until after the event and the new price is established. The expected move is 13%. That is in part why Straddles may be more attractive to some.

This Tuesday AUG 27, 2024 I’ll be hosting a weekly ZOOM session at 415 EST that will cover some of this in part. It’s free, we do this on Tuesdays now and then, I’ll post the link Tuesday morning if anyone wants to check it out.

Currently 16 new names made the list…… These 3 here all show strength in the way of technical analysis. The first is “DAVE” I know a trader named Dave, they have a annual car show in his town that they literally shut the main street down for and it has to have well over 14,000 people there, like him it’s really really cool. This is a pic of it from last year…

Invest wisely, live charitably and be well

Brother Bill