Catch the bounce on NVDAHi, I'm The Cafe Trader.
We’re taking a deeper dive into NVIDIA (NVDA) — one of the leaders in the MAG 7 — with a short-term trade setup you can apply to both shares and options.
Setup Context:
NVDA is pushing into all-time highs, and we’re now approaching the average analyst price target (around $180). While we don’t know how price will react at this level, traders should be watching for pullbacks and trend continuations — prime zones for entry.
If we get a strong move down, I see $153 as a high-probability bounce area — where buyers are likely to step in aggressively.
Price Target Outlook:
The final price target will depend on how price moves into this zone:
- If NVDA runs to $200 before pulling back, targets shift higher.
- If it tops out around $180, we adjust accordingly.
That said, an initial bounce toward $169–$170 looks reasonable.
Options Note:
If NVDA sells off hard and fast, implied volatility (IV) will spike, making options expensive and reducing your edge. This is a setup that could play out over 2–3 weeks, but the first bounce could be quick — so timing matters.
Strategy: Staggered Entry Using Two Contracts
Use two contracts — one short-term, one mid-term — to maximize reward while managing time decay.
Contract 1: Short-Term (3–5 Days to Expiry)
Trigger Entry: As soon as price taps the demand zone (~$153)
Strike Entry Price ^^Target Price
155 $2.00 ^^ $6.00
157.5 $1.50 ^^ $4.50
160 $0.75 ^^ $2.50
You’re looking for a quick reaction: get in, take profit, and step aside while the market finds new balance.
Contract 2: Medium-Term (7–10 Days to Expiry)
Timing Tip: Wait for NVDA to stall or consolidate after the initial bounce — this is when IV comes down and contracts get cheaper.
Strike Entry Price ^^Target Price
155 $3.00 ^^ $15.00
157.5 $2.50 ^^ $12.50
160 $1.80 ^^$9.00
Important: Be careful trading too close to earnings. Contracts tend to get overpriced right before and after earnings drops.
That wraps up the short-term NVDA view.
Stay tuned for more trades and setups across the MAG 7.
@thecafetrader
Take care, and happy trading!
