U.S. stocks have shown some fatigue in recent days, especially with a significant sell-off occurring on May 21. $SPDR S&P 500 ETF(SPY.US)$ 、 $Dow Jones Industrial Average(.DJI.US)$ 、 $Nasdaq Composite Index(.IXIC.US)$ The closing declines that day were 1.61%, 1.91%, and 1.41% respectively.

The catalyst was primarily due to the weak performance of the latest round of US Treasury auctions, with auction yields significantly higher than market expectations, indicating low investor interest. Additionally, Moody's recently downgraded the credit rating of the US, exacerbating market concerns about the sustainability of US debt. This led to a decline in Treasury prices and a rise in yields. Furthermore, there are concerns that a US tax cut may increase the fiscal deficit and accelerate the explosion of US debt.

In addition, a series of upcoming catalysts are worth attention, as they may closely affect market trends, including:

Will US inflation data further slow down, and will expectations for interest rate cuts be reignited? Will US monetary policy be subject to political interference from Trump?

After the tariff negotiations enter a 90-day suspension period, will there be an agreement reached? What chemical reactions might arise from geopolitical risks and liquidity variables?

Will US corporate earnings meet market expectations? Can the performance of technology giants support high valuations? Is a technical adjustment approaching for US stock indices?

The macro environment is complex, and no one can predict how the stock market will move next. However, in the upcoming months, fluctuations and adjustments are likely unavoidable. Nevertheless, from a long-term perspective, the Technology Sector will continue to be a major focus of market attention.

Speaking of the Technology Sector, let's discuss today's key points: $NVIDIA(NVDA.US)$ Next week, NVIDIA is about to release its earnings, and NVIDIA has always been one of the most watched symbols in the US stock market, with important trading activities around the earnings report.

Next, let's discuss what signals NVIDIA currently has in terms of fundamentals, technicals, and capital aspects, and how to easily deploy related opportunities using options!

Looking for trading signals from various sources!

To summarize briefly: NVIDIA has a strong moat, facing both challenges and opportunities ahead. The long-term trends in valuation and technical aspects remain unchanged, but there is a risk of short-term correction. In terms of options, the IV has not yet reached its peak level; both bulls and bears are still in conflict, but the large orders on May 21 showed stronger bullish sentiment. Now, let's look at the detailed content.

1. How are the Fundamentals?

From the performance perspective, there is no need to elaborate; past performance has been strong. Revenue and net profit figures, along with growth rates, have been quite impressive, mainly driven by the core business of data centers. The gross margin also remains at a high level, and cash flows and the balance sheet demonstrate stability. Looking ahead, the market forecasts for several key Financial Indicators in Q1 and Q2 of 26 show a trend of robust growth.

Although $NVIDIA(NVDA.US)$ the export of the H20 chip to China is restricted by the United States, which may affect revenue in the China Range, and the competition in the chip industry is intensifying (from major manufacturers like AMD, Google, Microsoft, Amazon, etc., as well as domestic manufacturers like Huawei), putting certain pressure on, NVIDIA is still the leader in AI chips. Its performance advantages and ecological advantages create a significant moat. Moreover, a number of Bullish news have recently emerged:

On one hand, breakthroughs in the Middle Eastern market, and cooperation with countries like Saudi Arabia and the UAE to invest in AI infrastructure could boost the demand for Blackwell chips. NVIDIA's Blackwell architecture chips are also working with Super Micro Computer for mass production to fully replace the old Hopper architecture. Moreover, NVIDIA has recently decided to establish R&D laboratories in China to cope with U.S. sanctions and is committed to designing compatible AI chips for the Greater China market, likely to be completed by June. Additionally, Jensen Huang announced today the launch of the next-generation GB300 system and the mass production of personal AI computer DGX Spark among other important advancements.

However, the market also has concerns. There are worries about potential supply chain risks for NVIDIA at the early stage of Blackwell mass production, concerns that the growth prospects in the Middle East may encounter execution risks, and that NVIDIA's successful experience in large-scale deployment of AI infrastructure in the Middle East may be replicated by other AI infrastructure companies or other large-scale enterprises. Currently, there is a viewpoint in the market that NVIDIA's impressive three-digit growth rate will further slow down in the 2027 fiscal year.

In terms of valuation, NVIDIA currently has a static PE of 44.83, which is lower than its historical median but higher than the industry average (the PE for semiconductors is 25 times). The price-to-book ratio and price-to-sales ratio are significantly higher than the industry average.

What signals do the technical indicators, capital flow, and options provide?

As of May 21,$NVIDIA(NVDA.US)$ The stock price has been fluctuating in the range of $130 to $138 in recent days. A short-term support has formed around $130, while there is short-term resistance near $138.

The BOLL indicator shows that the current stock price is between the middle and upper bands, closer to the upper band at 141.551; if it maintains, a new round of breakthrough may be welcomed. The MACD shows that the DIF and DEA lines converge above the zero axis, with short-term momentum weakening, but the medium to long term remains in an upward channel. The KDJ line currently shows an overbought signal, reflecting a bearish short-term trend.

In terms of capital, there has been a continuous net outflow in recent days, with a net outflow of $1.7 billion on May 21, possibly mainly influenced by short-term profit-taking. However, from the short-selling data, the short-selling ratio on May 21 was 13.49%, which is lower than the market average, and the short interest ratio has recently declined, indicating that short pressure is limited.

Looking at the options data, the current IV is 56.23%, which is relatively moderate and has not reached high levels. In terms of options open interest, the open interest for options expiring before the end of June is not significantly different, showing a relatively obvious long and short divergence.

Here is a further explanation: Generally speaking, in the three weeks leading up to earnings announcements, due to high uncertainty, the IV will rise rapidly; after earnings announcements, the IV drops rapidly, resulting in an IV Crush. *An increase in IV reflects the market's expectation that the price volatility of assets will increase. All else being equal, an increase in IV will lead to a rise in options prices.

Looking at the unusual options activity, several relatively large trades on May 21 are worth noting. Overall, there is a bullish sentiment, with views on price ranges of $110-160 and more narrowly $120-145.

The first order is bullish, possibly anticipating that NVIDIA will not drop to $120 before 260116. The second order may reflect a recent bullish sentiment but believes that after the earnings release, it won't rise to $145. The third order's buy call and sell put show bullish sentiment. The fourth order may reflect traders' expectation that by 250815, the stock price will not exceed the range of $110-160. The fifth order expresses bullish sentiment through three different strike prices for buying calls.

3. To summarize

$NVIDIA(NVDA.US)$ The leading position in AI computing power is relatively solid, forming a moat in terms of performance and ecosystem. Financially, it remains on the track of rapid growth and steady performance, with recent bullish information supporting it. However, there are also risks such as intensified competition, uncertainties from geopolitical policies like export restrictions, supply chain risks, and developments in the Middle East not meeting expectations.

Currently, the valuation is relatively high, reflecting the market's confidence in its future profitability, but if results do not meet expectations, a valuation adjustment may occur. The stock price has been fluctuating between $130-138, and if it breaks through the upper Bollinger Bands line, a new round of upward momentum may emerge. Combined analysis of MACD and KDJ indicates there may be short-term correction risks, but the long-term upward trend has not changed. Recent outflow pressure from funds may stem from short-term profit-taking, but current short selling pressure is limited.

Currently, the options' IV has not yet reached its peak, with the possibility of further increases. The distribution of options open interest shows that bulls and bears are still trading, but recent unusual options activity has indicated a relatively bullish sentiment, and traders are focusing on the price ranges of $110-160 and $120-145.

How to easily deploy using options?

First, there needs to be a determination, then use tools to assist in decision-making, and the determination should be made in conjunction with the cycle. Previously, there was a specific discussion on options deployment strategies during earnings periods, and if interested, you can click here.《It's Earnings Season! How to Operate Options? This article is enough!》Conduct a review. Overall, the following introduction will explain the related options strategies in several situations.

In the short term: investors holding the underlying stock may consider using long a put to hedge against downside risk.

Some investors may also bet in the short term on price breakthroughs driven by earnings performance (small breakthroughs might employ a Bull Call Spread or Bull Put Spread, while large breakthroughs might use a Long Straddle, the latter also aligns with a strategy to go long IV before earnings):

In light of this consideration, expiration dates can be chosen shortly after the earnings announcement, with strike prices combining your manageable capital cost and the price ranges of 110-160 dollars and 120-145 dollars that traders are focused on.

Looking a bit further back, from a purely earnings-based options strategy perspective, some investors may short IV on the day of the earnings announcement. For example, using a Short Strangle, if on May 28 you predict that NVIDIA's stock price will not fluctuate more than 10% after the earnings announcement, and assuming NVIDIA's stock price is 130 dollars that day, the corresponding Put and Call strike prices would be approximately 117 dollars and 143 dollars. However, it is important to note that the theoretical maximum loss of a selling strategy has no lower limit.

In the medium term, as macro and individual stocks may have many uncertain factors in the next two to three months, things may become clearer afterward, so some investors might consider employing a spread strategy to trade time for space. This involves selling near-month call options while buying farther-month call options.

Because the time value of near-month options (such as June) decays far more quickly than that of farther-month options (such as September), by selling near-month options to collect premiums while buying farther-month options, one retains medium-term upward potential, thus hedging against short-term volatility risk and earning time decay profits. However, attention should be paid to cost issues and the potentially significant theoretical losses that selling options may entail.

If there are other judgments, you can also try using Futubull's new desktop option strategy feature to find an options strategy that suits you.

Alright, that's it for today regarding$NVIDIA(NVDA.US)$ and options strategy. What are your thoughts on NVIDIA's future trends? Feel free to leave a comment and share!

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