NVDA (Nvidia Corporation) Technical Analysis - January 2025
Technical Overview:
Current Price: $142.62 (-3.12%)
Key Levels:
- Support: Around $136 (recent low), $108 (200-day EMA)
- Resistance: $153.13 (recent high), psychological resistance at $160
- 52-Week Range: $59.94 - $153.13
Moving Averages:
- 20-day EMA: $108.79 (short-term bullish)
- 200-day EMA: $71.80 (long-term uptrend intact)
Indicators:
- RSI (14): 53.95 (neutral, no strong momentum)
- MACD: Slightly bullish with a positive crossover, indicating upward momentum
- IV Rank: 14% (low implied volatility, indicating options may be cheap)
- MFI (Money Flow Index): 55.37 (neutral, indicating balanced buying and selling pressure)
Fundamental Overview:
- Market Cap: $3,492.76B
- Income: $63.07B
- Sales: $113.27B (P/S ratio of 30.84, suggesting overvaluation concerns)
- Book Value per Share: $2.69 (trading significantly above book value)
- Cash per Share: $1.57
- Debt/Equity: 0.16 (low leverage, financially stable)
- Quick Ratio: 3.64, Current Ratio: 4.10 (strong liquidity position)
Profitability Metrics:
- ROA: 84.01% (exceptional asset efficiency)
- ROE: 127.21% (strong return on equity)
- Profit Margin: 55.69% (high profitability)
- Gross Margin: 75.86%
Growth Metrics:
- Sales Growth (Y/Y): 152.44%
- EPS Growth (Y/Y): 127.71%
- EPS Growth (Next Y): 50.74%
Insider & Institutional Holdings:
- Insider Ownership: 3.99% (low but stable)
- Institutional Ownership: 65.29% (high institutional interest)
- Short Interest: 1.22% (low short interest, indicating bullish sentiment)
Volatility:
- Beta: 1.63 (higher market sensitivity)
- ATR (14): 5.76 (moderate volatility)
Bias:
Bullish with potential pullbacks
- NVIDIA is in a long-term uptrend, supported by strong fundamentals and institutional interest.
- However, the RSI and MFI indicate a neutral stance, suggesting consolidation before a potential breakout.
- Low implied volatility makes options attractive for long positions.
Higher Probability Trade:
1. Bull Call Spread (Bullish Play)
- Buy the $145 Call
- Sell the $155 Call
- Expiration: 30-45 days
- Rationale:
- Profits if NVDA moves higher towards $150-$155.
- Lower cost due to the low implied volatility.
2. Cash-Secured Put (Neutral to Bullish Play)
- Sell the $140 Put
- Expiration: 30-45 days
- Rationale:
- Generates income while potentially acquiring shares at a discount if assigned.
- Takes advantage of low implied volatility.
3. Iron Condor (Neutral Play)
- Sell the $135 Put / Buy the $130 Put
- Sell the $150 Call / Buy the $155 Call
- Expiration: 30-60 days
- Rationale:
- Profits if NVDA remains range-bound between $135-$150.
- Takes advantage of time decay.
Conclusion:
- Preferred Trade: Bull Call Spread – Higher probability given strong fundamentals and potential upside.
- Key Watch Levels: $136 support and $153 resistance.
- Risk Management: Stop-loss if price closes below $136 for bullish trades.
