$NVIDIA(NVDA)$ ๐ถ๐ Why I Just Sold NVDA to Take Profit โ Daily Chart + Minute Chart + My Cash-Secured Put Plan
Today I decided to take profit on NVDA at around $219.20 ๐ถ๐ฐ. I only sold a tiny fraction of my position, but the reason is important: I want to lock in gains while the stock is showing signs of short-term weakness. My next plan is to sell a cash-secured put at the $195 strike and collect premium while waiting for a better entry price. ๐ฆด๐
๐๐ถ What I Saw on the Daily Chart
Looking at the daily chart, NVDA recently rallied strongly and moved above the $222โ223 resistance area ๐๐. However, todayโs candle pulled back after touching that region. The stock is now trading around $219, which is below the recent intraday high. That tells me momentum has slowed for the moment. ๐ถโ ๏ธ
I also notice that price is still above the major moving averages, so the longer-term trend remains bullish ๐๐ข. But after a sharp run-up, it is normal for a strong stock to pause, consolidate, or retrace. I would rather take some profit into strength than wait for a deeper pullback. ๐ฐ๐พ
โฑ๏ธ๐ถ What the Minute Chart Told Me
On the minute chart, I saw intraday selling pressure after the morning move ๐โฑ๏ธ. Buyers were unable to keep pushing the stock higher, and price started drifting lower. Volume was active, which suggests traders were taking profits around the resistance zone. ๐ถ๐
For a short-term trader, that is often a signal to reduce exposure. I am not saying NVDA has become bearish; I am saying that the risk-reward for holding after a strong rally became less attractive. Locking in profit keeps me emotionally disciplined. ๐ง ๐พ
๐ฐ๐ถ Why I Chose to Sell Now
My philosophy is simple: โNo one ever goes broke taking profit.โ ๐ถ๐ฆ
By selling some shares now, I:
* lock in gains,
* reduce portfolio risk,
* create cash for new opportunities,
* and avoid watching a profitable trade turn into a loss. ๐โก๏ธ๐ต
Many traders make money on paper but fail to realize profits. I prefer to bank at least part of the move and stay flexible. ๐ถ๐
๐ง๐ถ I Am Still Bullish on NVDA
Selling shares does not mean I have turned bearish on NVIDIA ๐ถ๐. I still believe the company is one of the strongest AI leaders in the market. Data center demand, AI infrastructure spending, and long-term earnings growth remain powerful themes. ๐๐ฅ๏ธ
My action is about timing and risk management, not about abandoning the company. I would be happy to own NVDA again at a lower price. ๐พ๐
๐ฏ๐ถ My Next Plan: Sell a Cash-Secured Put at $195
I am planning to sell a cash-secured put with a strike price of $195 ๐ถ๐ฐ. The premium is currently around $8.25.
One option contract controls 100 shares, so the premium received would be approximately:
* $8.25 ร 100 = $825 ๐ต๐พ
That $825 is collected upfront if I sell the put. I can keep it immediately, regardless of what happens next, as long as I can meet the cash-secured requirement. ๐ฆ๐ถ
๐งฎ๐ถ What Is My Effective Entry Price?
If NVDA falls below $195 and I get assigned, my effective cost basis would be:
* $195 โ $8.25 = $186.75 per share ๐๐พ
This is the key reason I like the trade. I am effectively saying:
โ๐ถ I am willing to buy NVDA at an effective price of about $186.75, not at todayโs price of $219.โ ๐ก๐ฐ
That gives me a meaningful cushion compared with the current market price.
๐๐ถ How Much Buffer Am I Getting?
Current price โ $219.12 ๐
Strike price = $195 ๐
Difference = $24.12
Percentage buffer:
* 24.12 รท 219.12 โ 11% ๐งฎ๐พ
So NVDA could fall roughly 11% before my strike is reached. After including the premium, my effective entry is about 14.8% below the current price. That is a much more comfortable level for me as a long-term investor. ๐ถ๐ก๏ธ
๐พ๐ถ Why I Prefer Selling the Put Instead of Buying Now
If I buy NVDA today at $219, I immediately take full downside risk from that level. By selling the $195 put:
* I get paid $825 upfront ๐ต,
* I wait for a lower entry price ๐,
* and I only buy if the stock falls significantly. ๐ถ๐ฏ
This strategy fits my Options Puppy style: get paid while waiting patiently. โณ๐พ
โ ๏ธ๐ถ The Risks I Still Respect
This trade is not risk-free. If NVDA drops sharply, for example to $160, I could still be assigned at $195 and face an unrealized loss. ๐๐ฌ
I must therefore be comfortable owning 100 shares and have enough cash reserved for assignment. A cash-secured put should always be backed by real cash, not by hope. ๐ฆ๐ถ
๐๐ถ My Technical Levels Going Forward
The areas I am watching are:
* Resistance: $222โ223 ๐ง๐
* Near-term support: around $215 ๐
* Major support: around $200 ๐ก๏ธ
* My put strike: $195 ๐ฏ
* My effective cost basis: about $186.75 ๐ฐ
If NVDA stabilizes above support and resumes its uptrend, the put premium will decay and I may keep the entire premium without buying shares. If it pulls back toward my strike, I will reassess whether I want assignment or whether I should roll the option. ๐ถ๐
๐ง ๐ถ The Bigger Picture
Todayโs decision is really about discipline. I took profit after a strong rally, respected resistance on the daily chart, and reacted to weakness on the minute chart. Instead of chasing price higher, I am moving from an aggressive position into an income-generating position. ๐ต๐พ
Selling the $195 cash-secured put for about $8.25 allows me to earn income while waiting for a potentially better entry price. My effective entry of roughly $186.75 gives me a wider margin of safety than buying at $219 today. ๐๐ก๏ธ
As an Options Puppy, I remind myself every day:
Take profit when the market offers it, keep cash ready, and let premium and patience work for me. ๐ถ๐ฐโณ
Trade Feed: Who is your favorite trader?
Come to the Trade Feed Topic to find more trading opportunities! Also, please feel free to recommend and introduce fellow Tigers to the "hidden gem traders" that you've discovered!
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments