Options Corner: NVDA Slows After Stellar Multi-Year Run

Core Viewpoint - Nvidia has been trading within a range for several months, currently at a key support level, with recent earnings and announcements not providing enough momentum to break out of this range. Investors are seeking the next catalyst for movement [1]. Stock Performance - Nvidia shares have increased by 50% year-over-year but have declined approximately 8% in 2026 [1]. - Over the past three years, Nvidia's stock has rallied about 560%, rising from around $25-$26 to approximately $171 [3]. Valuation and Technical Analysis - The stock has experienced a consolidation phase over the last six to seven months, with valuations coming in despite growth in earnings [4]. - The stock is currently below both the 200-day and 50-day moving averages, which have historically served as support levels [5][6]. - A critical support level is identified at around $170, which has been a significant area of trading volume [7]. Support Levels and Market Impact - If the stock continues to decline, initial support levels to watch are around $158-$157, with a further key support at approximately $145 [8]. - Nvidia constitutes about 7% of the S&P 500 and over 13% of the NASDAQ 100, indicating its significant influence on overall market indices [9][10]. Trading Strategy - A neutral to bullish trading strategy is suggested, involving selling cash-secured puts to profit from current levels near support while allowing for potential share acquisition at lower prices if the stock falls [12]. - An example trade involves selling an out-of-the-money put option with a strike price of $165, which could yield a credit of about $410, lowering the break-even point to approximately $160.90 [14][15].