Nvidia Soars Into Earnings: What's Next?

NVIDIA Corporation (NASDAQ:NVDA) is set to report first-quarter 2021 earnings after the bell on Wednesday and its stock is running up into the event.

Nvidia reported record-breaking fourth-quarter 2020 earnings on Feb. 24, and traders believe the multinational technology company is set to print another big beat. For the fourth quarter, Nvidia posted revenue of $5 billion, up 61% from the same period a year prior. The company’s earnings per diluted share came in at $2.31.

On Friday, shares gapped up over a formerly heavy resistance level at $591. Bullish momentum has pushed the stock 4% higher than Friday’s closing price and through another resistance level at $614.

The NVIDIA Chart: On Monday morning, big bullish volume pushed Nvidia's stock back toward its all-time high of $648. The stock is trading up almost 15% from the bullish double bottom pattern it created May 13 and May 19 but has left two gaps below on the move: one gap from $563 to $570 and another between the $587 and $594 levels.

Because gaps fill 90% of the time, it's likely the stock will trade back down into those levels at some point in the future, however, another earnings beat would likely postpone it.

Nvidia is trading above both the eight-day and 21-day exponential moving averages (EMAs) and on Friday the eight-day EMA crossed above the 21-day EMA, all of which are bullish indicators. Nvidia's stock is also trading above the 200-day simple moving average, which indicates overall sentiment in the stock is bullish.

Bulls want to see continued bullish momentum into earnings to push Nvidia's stock up toward the $350 area. If Nvidia was able to make a new all-time high, it could see further upside into blue skies as there is no resistance in the form of price history above.

Bears want to see Nvidia post an earnings miss or for a beat to be met with sellers. It is often tricky to trade earnings with a bullish bias when the stock has already run up into the event. If Nvidia's stock falls back below the $614 level it could fall toward its first gap in the $590 area. A loss of that level as support and Nvida's stock could drop back towards the lower gap near $570.

NVDA Price Action: Shares of Nvidia were trading up 4.4% at $626.48 at time of publication.