The Big 3: NVDA, AAPL, MSFT

Marlee Caden (0:02)

Welcome back to Trading 360, I'm Marlee Caden. It's time for the big three. We've got three stocks, three charts, and three trades for you. Kevin Green will take us through the charts today. Here to take us through the trades, Tim Biggam, Options Strategist. Great to have you both with us. Tim, we got quite a few earnings this morning. We're seeing a nice move to the upside. Although the NASDAQ did just turn into the red here, but the Dow posting some really nice gains along with small caps today. How are you looking at the action we're getting right now?

Tim Biggam (0:29)

Yeah, I think it's going to continue on like this, Marley. More of a sideways slug with the kind of halves and half-nots. I think you'll see individual stocks, maybe with still decent moves, but certainly the indices probably mired in a sideways sort of consolidation here, near all-time highs, albeit now fairly far off. So unless we have a absolute string of earning speeds, especially from the top market cap names, I think it'll be tough going for the indices at least until we get maybe some clarity on oil, as you talked about in the last segment, leading everything here and the long end of the curve, I think, needs to come down some more. The 10-year below 5% would be a big benefit for stocks.

Marlee Caden (1:16)

Tim, you've done something today that I don't know that anyone has ever done on the big three. You brought us the literal big three today. You have the three biggest companies by market cap. So let's start with the behemoth in Nvidia as your first trade today. What are you seeing in Nvidia right now?

Tim Biggam (1:33)

Yeah, Nvidia, since basically last earnings, Marlee, has been the worst performer of these big three names, Apple and Microsoft. The other two we're going to look at. Down about 3% over that time frame, but approaching some major support right around that kind of 2.12.5, 2.15 area. So I kind of like it going forward here. Earnings are coming middle of November, so I'm not going to get kind of in the way of that. I'm going to structure a trade just short of that, take advantage of the fact that IV has popped here in Nvidia on the downdraft. So kind of like where the stock's at, really like where the IV's at and stay away from earnings. So just going out to November, selling the 205, 200 put spread, getting about a buck here, so still plenty of downside cushion, about 5% and get on the way of earnings, take advantage of an Nvidia that has come back down and should, I think, find some support somewhere around here. Certainly, I think their business will continue to be the best of the best, but the stock price well off the highs, but I think we'll find some support here over the coming weeks.

Marlee Caden (2:46)

Yeah, I mean, we're certainly well off the highs, and some of the more parabolic moves we saw from this name last year. It's been a bit more sideways for Nvidia. KG, as we look at the chart here and Tim highlighting that this is the worst performer of the big three that we have today, what are you seeing in the technical setup and noting again that we're also ways away from the earnings event Nvidia reports at the end of the season?

Kevin Green (3:11)

Well, Marlee, you kind of just did my job. I mean, the stock has been trading sideways or in a range and it tries to break out, but we are kind of back within that range that we've seen for the most part for the better part of this year. We look at this time last year, we did see the stock kind of pull back below the 20 day, 50 day moving average, and it consolidated with the area of support sitting at around 170 in an area of resistance at around 195 Before we did see a breakout and we started making those highs of around $236.

Unfortunately, pull back leverage the 200 day moving average is the key area of support. Then we started making higher lows. Then we did have a failed breakout, technically. We got to that 243 level and now we have pulled back below the 20, below the 50 day moving average. Now, there is a reason to say that maybe we are closer to an area of support. That 210 level has been an area over the last two months, three months where buyers have actually stepped into this name. Maybe that's going to be the case today. Over the last four days, we've been trading between 211 and let's say 220 or so and we are trying to consolidate. Now, the RSI did break the higher low succession, so that's something to be mindful of. MACD is in a bearish formation, still above the zero line with the 12 EMA below the 26 EMA here. You got to pretty much hold this level. If not, you're looking at the 200 day moving average. If we go to the weekly chart, you could also then make the case that the 20 week moving average is acting as an area of support.