Our trade idea today comes from a stock with the ability to take off in a hurry, consequently, it has the ability to move in the other direction too. However, there seems to be a well-defined range the stock is consolidation around as the overall market tries to break out of its congestion.
Nvidia (NVDA) has formed a horizontal channel between 262 and 280 where it has bounced around between for a couple weeks now. This zone of congestion could mean the stock is ready to breakout at any moment, perhaps to the downside or upside.
To the downside, watch for a break of and hold below that 262-264 zone for puts and for calls, keep an eye out for a break out above pre-market high of around 275. As always let price action around these levels dictate when and if you enter the trade. Do not blindly take a trade simply because price has touched that level or even temporarily broken it. Check out the video for more!
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