NEW DIRECTIONAL CALL PLAYS

NVIDIA Corp. - NVDA - close 10.12 change +0.32 stop 9.38

Company Description:
NVIDIA Corporation (NVIDIA) is a provider of visual computing technologies and the inventor of the graphics processing unit (GPU). The Company's products are designed to generate graphics on workstations, personal computers, game consoles and mobile devices. NVIDIA serves the entertainment and consumer market with its GeForce graphics products, the professional design and visualization market with its Quadro graphics products, the computing market with its Tesla computing solutions products, and the mobile computing market with its Tegra system-on-a-chip products.

Target(s): 10.99, 11.39, 11.80
Key Support/Resistance Areas: 11.85, 11.45, 11.00, 10.25, 9.45
Time Frame: 1 to 2 weeks

Why We Like It:
NVDA has been absolutely obliterated after lowering guidance earlier this year. On 8/12 the company missed earning estimates but the stock has been bought ever since. NVDA is now forming an ascending triangle on its daily and intraday charts and looks ready to break out higher. After the broader market reversal on Friday I believe we may be in for a mini rally and this should catapult NVDA up towards our targets. The plan is buy calls if NVDA trades to $10.30 which is above the 8/23 high and its 50-day SMA. Our targets are +6.5%, +10.5% and +14.5% higher. Our stop is below the stock's recent swing low and the 20-day SMA which is starting to turn higher. Nimble traders may consider timing an entry in the $9.80 area.

Suggested Position: Buy October $10.00 CALL, current ask $0.74

Annotated daily chart:

Entry on August xx
Earnings 11/4/2010 (unconfirmed)
Average Daily Volume: 23.5 million
Listed on August 28, 2010