Don't Trade NVIDIA (NVDA) Earnings Without Watching This

Are you worried if you're an owner of Nvidia that earnings are coming up? And yes, for all you traders, I see the cup and handle brewing. Why am I going to buy into what I already know is going to be a volatile event. While we're looking at Nvidia, Nvidia's earnings are coming up on the 26th. Had great numbers a moment ago. You mentioned earlier a situation you had where a stock went against you. Number one, is it Are you worried if you're an owner of Nvidia that earnings are coming up? Are you buying Nvidia before earnings? Or what are your thoughts on when to buy a stock as good as Nvidia's numbers are with earnings coming up? What are your thoughts? >> Yeah, so a couple things. Number one, when we were talking earlier, we were talking about trading, or at least I was. And there's a ma- major difference between trading and investing. So, if most folks here are probably fall into the investing category. Even some traders think they're traders, they're really investors. So, when we're talking about investing, okay? Yes, you're going to hold a stock like Nvidia through earnings because there's no reason at this point to sell it. And so, what you need to do is learn how to take protective action. So, that can come vis-à-vis just a simple purchase of a put option. Puts are expensive. Not having an insurance policy can be even [clears throat] more expensive. There are better ways to go. They're a little bit more complex, but the preferable measure would be a collar. The only downside to a collar would be picking the upper strike because if Nvidia hits it out of the park, you know, you have a situation where the stock could at least potentially get called away from you. Reality is, if you position the collars right, and we can teach you this in our options curriculum here at VectorVest, there's very little chance of that. Uh so, bottom line is, yes, you should continue to hold Nvidia through earnings. You should not buy it prior to earnings if you were listening carefully because I'm thinking about taking out an insurance policy on mine, right? And yes, for all you traders, I see the cup and handle brewing, and maybe the How many What's the low to the high there Brian? >> The low down >> Yeah. No, no, no. The of the double bottom, recent one, triple bottom. >> 190? >> Yep. And what's the high back on the left? >> Back on the left is probably the two >> 240? So, that's 50 points. >> 235? >> All right. So, uh Yeah, like we'll call it 50 point 45, 50 points. That's your expected move, you know, should things go exceedingly well in their earnings report. So. So. Or should things go exceedingly poor. >> This >> You know, uh you could go right back down to those lows again. Uh and so, that's why you want to have an insurance policy is is is for those reasons. Uh but, I would never trade earnings for those reasons as well. I can give you a great example. So, this past earning season, uh it wasn't Infinera. It was a Astera Labs ALAB. They increased their earnings uh by 104%. >> I can't remember. >> And the stock went down 12% the next day. >> With good guidance, too, right? >> With great forward guidance, improved forward guidance. So, the bar has never been higher because of these higher interest rate concerns, because of the circular money concerns, because of all the narratives. You know, but at the end of the day, the nice thing about VectorVest is I can look at the bottom line, the facts. Sales growth is going up. That go That leads to higher earnings growth, which is the second one from the bottom. Higher earnings growth leads to higher bottom line, assuming similar efficiency in the future. You know, and so, is it still a stock you want to own? It's just, you know, earnings Listen, I've been at this game See all these gray hairs? That's from earnings reports. Over to you, Todd. Yeah, at Successful Investor, we we avoid volatility and we avoid particularly volatile events like earnings announcements. So, typically, if we're within a couple weeks out of the earnings event, we will wait for the event to clear. Instead of I call it putting my head in the buzzsaw, why Why am I going to buy into what I already know is going to be a volatile event? Uh you know, you're There's a lot of uh or I shouldn't say it this way, but there are a lot of folks who maybe are trading their little 10% trailing stop, right? They're going to get knocked out on intraday volatility, just on the range of the move, just from that event. And then you come back 2 days later and you're beating your fist on the table that you got stopped out and the thing took off like a bird. So, let's wait for the event to clear and then I'll buy in after it takes off because then I know it's not going to collapse. Well, as VectorVest coaches, what's the the single most important thing that we need to consider before buying any stock? What it's really worth. What about Oh, you can steal the mic? What's the market doing? >> Yeah, I'm going to So, would you still be before Yes, you want to know what it's worth and then but before you buy it, do we have a a signal that says, "Hey, the market's in an uptrend?" >> Chris, if the market's in a downtrend, would are you buying are you buying any stock that regardless of their earnings or whatever? >> Yes, counter ETFs. >> [laughter] >> Touché, Steve. >> Possibly. >> Possibly. 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