Investors are sharpening their pencils as Nvidia (NVDA) prepares to release its Q4 FY24 earnings report on Wednesday, February 21st, after market close. Expectations are high, and the results could reverberate across the tech sector and even broader financial markets. Here’s what you need to know:

Nvidia (NVDA): Key Metrics to Watch

• Earnings Per Share (EPS): Analysts anticipate an EPS of $4.56, a significant 418% increase compared to the same period last year. A beat or miss on this crucial metric will likely dictate the initial market reaction.
• Revenue: Consensus estimates predict revenue of $20.38 billion, marking a 112% year-over-year jump. Exceeding this benchmark could fuel investor optimism.
• Guidance: Management’s outlook for the upcoming quarter will be closely scrutinized for insights into future performance and broader industry trends.

Impact on NVDA Options Traders

• Volatility: Expect heightened volatility surrounding the earnings release. Option premiums will likely surge, offering potential high returns but also carrying increased risk.
• Trading Strategies: Consider delta-neutral strategies like straddles or strangles to capitalize on volatility without directional bets. Alternatively, directional calls or puts can offer higher potential returns but come with greater risk.

Tech Sector Implications

• Sentiment Gauge: A strong earnings report could boost investor confidence in the entire tech sector, particularly companies relying on semiconductors. Conversely, a miss could trigger negative sentiment.
• Sector Rotation: Depending on the results, investors might rotate funds into or out of tech, impacting other sectors like healthcare or consumer staples.

Financial Markets & Broader Economy

• Risk Appetite: A positive earnings report could improve overall risk appetite, potentially boosting other asset classes like equities. Conversely, a negative surprise might dampen sentiment across the board.
• Economic Indicators: Nvidia’s results could offer valuable insights into the health of the global chip industry and broader economic trends.

Technical Analysis: NVDA/USD

• Current Price: $726.58
• Resistance: Key resistance levels lie around $732 and $745. A breakout above these levels could signal further gains.
• Support: Crucial support level sits at $720 and $711. A breakdown below this level could indicate a pullback.
• Indicators: The Relative Strength Index (RSI) is currently nearing overbought territory, suggesting a potential short-term correction before reaching higher levels.