How to Confirm Swing Trade Runners Using Options Flow - $NVDA

Aggressive flow* is a powerful indicator when looking to identify or confirm a day trade opportunity. We're going to start off by looking at a recent trade opportunity in $NVDA that put in a $13 move in 2 hours. Let's take a look at the chart.

*Aggressive flow refers to options flow transactions that contain several characteristics associated with conviction in short term volatility.

$NVDA Daily chart with 20 SMA (Green), 50 SMA (Purple), 100 SMA (Red), 200 SMA (Orange)

We noticed $NVDA approaching the 100 day SMA on March 17th, a significant level of resistance the stock has struggled to break above for over 2 months. $NVDA was added to the watchlist and alerts were set for $249.50.

$NVDA Aggressive flow on March 18th via TitanFlow

We detected 2 aggressive bullish transactions shortly after our $249.50 price alert was triggered. This is what we refer to as a follow through sentiment indicator, meaning institutions are indicating conviction in continued upside in the middle of a breakout. These particular contracts have 7 days until expiration, suggesting that institutions believe there is potential for a continuation to the upside over the next couple trading sessions. We can use this type of information to leave a runner in our position to capitalize on continued upside.

$NVDA Hourly chart 3/16/22 - 3/18/22

Looking at the hourly chart, we see our aggressive upside move play out with a $13 breakout from our 249.50 entry within the first hour of market open on March 18th, good for 90% - 120% profit on the 3/25 contracts, depending on the strike price selected. What's really interesting is how the next couple trading sessions played out.

$NVDA Daily chart

As we suspected, $NVDA ran for multiple days based on the aggressive flow with 3/25/22 expiration detected on March 18th. The $13 move on our day trade setup was great, but keeping an eye out for follow through sentiment in the options flow market allowed us to catch a much larger move. Holding runners even just half way through the full move on would have resulted in roughly 200% profit from our original entry at $249.50.

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