A second-affair hit last night, and the market and NVDA gapped down huge this morning. It's the second 5%+ gap-down in a week, on its own news, with the market still above its 200-day.
Then it turned. By late morning, it was back near $166, more than 11% off the low.
So, the obvious move is to chase the rip, right? The data says no.
I pulled every S&P 500 stock since 2000 that gapped down 10% or more, closed in the top 20% of its range, and was still 30% or more under its 52-week high. That's 310 days. Buying the strong close on those days lost money.
What worked was patience. Let the stock come back to the middle of the day's range over the next week and buy it there. That filled about 63% of the time, and 64% of those trades were winners.
Small edge, real risk, defined stop. As the data guy, this is the version I'd actually trade.
So, here's the exact level, the stop, the target and the exit, right below.
