By the time you read this, NVIDIA Corporation (NASDAQ: NVDA) will have announced its earnings data for the most recent fiscal quarter of 2024.
I’m writing this on Wednesday, August 28, before the announcement comes out.
This is an important opportunity for traders to understand the true opportunities behind large earnings announcements like this.
On Wednesday, before the data went public, nobody knew how the price would react.
See the headlines below:
Here’s a multi-day chart of NVDA before Wednesday afternoon’s announcement for reference:
I’m not holding shares of NVDA before the announcement!
Nobody knows how the price will react to earnings … It would be foolish to try and predict something like that.
Instead, I wait for the earnings to come out, and then I trade the resulting volatility.
Bullish or bearish, my framework offers trade patterns for both outcomes.
But it’s essential that we approach these plays correctly …
Thursday’s NVDA Volatility
First of all … I probably won’t trade NVDA.
The share price is too high for my comfort zone. I trade lower priced stocks so that I can load up on shares and ride the percent gain.
It’s the same small-account strategy that all my students use.
Today, I’m more focused on a stock like Serve Robotics Inc. (NASDAQ: SERV). It’s a former runner that started to move after we learned of NVDA’s stake in the company.
And right now prices are consolidating around key support at $10.
Take a look at the chart below, every candle represents one trading day:
A bullish reaction from NVDA could cause a rally in SERV stock today and tomorrow.
And SERV isn’t the only AI stock capable of spiking this week …
These are some of the hottest AI penny stocks on my watchlist.
How To Trade These Runners
I already mentioned that my framework has viable trade patterns for bearish price action AND bullish price action.
And it does NOT require a trader to build short positions.
I actually discourage my students from going short in the beginning. It’s a more dangerous strategy, the risks are greater.
This is the whole framework that my students and I use to trade.
But for new traders, it’s easy to get confused in this market …
- Which pattern do I use?
- What should my trade plan look like?
- How much should I risk?
- Which stock should I be trading and when?
Right now, my newest students are using AI to build smart entries on the hottest stocks.
Enter your favorite ticker and my AI trading system will give you a trade plan as if you asked me directly.
New traders don’t need to wander around in the dark anymore. AI can shine a light on the hottest trading opportunities in the market!
Cheers.
*Past performance does not indicate future results
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