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Why Nvidia's Stock Has a Firm Place in This Trader's Portfolio

Patrick T. Fallon | Bloomberg | Getty Images

There's more juice left in the semiconductor trade.

So says TradingAnalysis.com founder Todd Gordon, who said Thursday that Nvidia's stock appears to be on the cusp of a breakout.

Nvidia has rallied about 170% off its March lows but has traded sideways since the start of September. Gordon owns 30 shares of the stock, a roughly 3% position in his portfolio.

"I think it's time for Nvidia to begin to break out of this consolidation," Gordon told CNBC's "Trading Nation." "We're looking for a little bit of a trigger or some kind of boost, some kind of positive data point to push this up and out."

Nvidia's next earnings report on Feb. 17 could be the stock's ticket to new heights, said Gordon. He said the company is always determined to beat Wall Street's quarterly expectations.

Gordon suggested putting on an options trade expiring Feb. 19 to capture any possible post-earnings upside. He bought the $550-strike calls and sold the $600-strike calls, a $50 spread implying nearly 13% upside for Nvidia's stock.

He added that he'll "look to increase" his overall position in Nvidia as the stock heads higher.

"The semis are just continuing to act extremely well with 5G coming out [and] gaming being such an important segment here coming up to the holiday season," Gordon said. "With 5G coming on, the semiconductors are going to be involved in everything everywhere. So, it's a great sub-industry to be in within the technology sector."

Nvidia traded lower slightly in Friday morning trading.

Disclosure: Gordon owns shares of Nvidia.

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