Editor's Note:

In addition to tonight's new candidate, consider these stocks as possible trades:

SNDK - The breakout past $40 looks like a bullish entry point. The 100-dma might be resistance but traders could aim for the $44-45 area.

FLDM - This stock has been showing some relative strength and the breakout past $14.00 could be a bullish entry point.

SMH - A lot of the semiconductor stocks are showing strength and the SMH is breaking out from an inverse head-and-shoulders pattern. The SOX index just broke out past resistance today.

LLTC - This is another semiconductor stock and LLTC broke out past resistance near $29 and its 50-dma.

- James


NVIDIA Corp. - NVDA - close: 14.53 change: +0.32

Stop Loss: 12.95
Target(s): 16.75
Current Gain/Loss: unopened
Time Frame: 6 to 12 weeks
New Positions: Yes, see below

Company Description

Why We Like It:
NVDA recently had some pretty positive things to say about their GPU business in the smartphone market. It looks like this portion of their business is poised to explode over the next few years.

Now add to the mix what looks like a bottom for shares of NVDA in August and a recent breakout over its 50-dma. Together it looks like a bullish entry point. I am suggesting bullish positions now. However, we only want to buy NVDA if both the stock and the S&P 500 index both open positive tomorrow. More conservative traders may want to add another condition and wait for the S&P 500 to trade over (or close over) the 1180 level before launching positions in NVDA.

NVDA can be a volatile stock so I'm suggesting a wide stop loss. More conservative traders may want to use a tighter stop loss. I'm listing a stop loss at $12.95. That's over 10% lower. My concern is that if the market plunges again we could see NVDA fill the gap and dip toward the $13.25-13.20 area. Cautious traders may want to use a stop near $13.60 instead and just re-enter on a dip near $13.00.

*See Play Details for Entry Point*

Suggested Position: buy NVDA stock @ open (see above)

- or -

buy the OCT $15 call (NVDA1122J15) current ask $0.96

- or -

buy the 2012 JAN $15 call (NVDA1122A15) current ask $1.87

Annotated chart:

Entry on September xx at $ xx.xx
Earnings Date 11/10/11 (unconfirmed)
Average Daily Volume = 19.3 million
Listed on September 13, 2011