02/26 Special GEX Outlook: NVDA Earnings, GEX LevelsNVDA Earnings Announcement 🔥
NVIDIA reports earnings today, after market close, and this release could create significant movement. Let’s dive right into the charts and see what the technicals are telling us!
With earnings so close, I typically look only at the nearest expiration, which in this case is 02/28 (Friday).
The implied move (IV) is around 10%, or approximately 12 points in either direction. That’s what the market has priced in for this binary event.
Key Observations
The price is hovering around the Transition Zone and very close to the HVL (High Volume Level) around 130–132.
This suggests the market maker is trying to remain delta-neutral leading into earnings. Once the report hits, expect potential volatility on Wall Street! 🚀
GEX Levels for Friday
🔴 Bearish Scenario
The bottom of the Transition Zone is at 126.
If price drops below 126, the next major put support is at 120 and extends to 115 (a negative gamma squeeze zone).
In other words, a breach of 126 could lead to a quick slide down to 120.
🟢Bullish Scenario
Major call resistance stands at 150, with a secondary call wall at 145.
Above 133 (top of the Transition Zone), calls dominate, meaning the path to 145–150 could open up if we break above the HVL.
Longer-Term Perspective 📊
We’re still in an overall uptrend, but history shows that even with positive surprises on 2 out of the last 4 earnings calls, the market had already priced in those expectations—often leading to a sell-the-news reaction.
I do not recommend trading right before the earnings with a binary mindset. It’s like walking into a casino and putting all your chips on red or black—it’s pure gamble! 🎰
Call pricing skew has been on a downward trend since DeepSeek (likely referencing a volatility event), indicating that call butterflies might not be as attractive on NVDA now as they were in the past few weeks.
Fundamental Analysis 💡
NVIDIA is a hype stock, much like TSLA was a few years back. Its current price has factored in a lot of the future potential.
Based on FastGraphs and other valuation tools, NVDA 1.44%↑ seems overpriced relative to its underlying performance.
A correction might bring it closer to fair value (the “green zone”), like it did in October 2022.
Until then, I’m not considering it for a 5+ year long-term investment—no matter what the short-term price action is.
Conclusion & Post-Earnings Strategy 👉
We simply don’t know which direction NVDA will move after earnings.
Typically, implied volatility (IV) expands before earnings (~90% of the time) and collapses for the nearest expiration immediately afterward.
Even IV on farther-dated expirations can continue to drift lower for a week or two post-earnings.
My Plan
Since I haven’t opened a time spread trade, I’m focusing on post-earnings setups.
If NVDA makes a huge move (breaking out of the 120–150 range), I’ll likely wait at least one more day before placing any new position to let open interest (OI) restructure.
April expirations will be more interesting for me after the dust settles.
