After Hours: Tracking Long Plays on Nvidia, Nordstrom and Molycorp

Includes: JWN, MCPIQ, NVDA
by: Midnight Trader

Below is a brief recap on each of the top-volume, news-driven movers in Thursday's after hours, taking a look at specific stocks' after hours movement and how that trade may offer insight into potential floor supports, ceilings and trading ranges that could develop in Friday's pre-market and early regular session.


Nvidia (NASDAQ:NVDA) surged 11.2% to 14.92 late in Thursday's after hours trading after beating Q2 EPS estimates and setting its Q3 revenue view above Street expectations. NVDA touched a brief early after-hours low of 13.14 before soaring from 13.41 to a first-half evening high of 16.23. It dropped back to maintain plus-side levels between 15.02 and 15.76 through the mid-session and second-half of night play. A pre-market open Friday may have potential near the 15 to 15.25 area. NVDA favors widening its after hours move in the next day session following an evening earnings event. It has narrowed or reversed its next-day price movement 12 times and has widened its next-day movement 17 times. In a separate event it saw a flat evening trade followed by a next-day gain. In the near-term, performance favors widening, with more aggressive, same-direction trades in the following day's regular session in six of the the last seven quarters. Looking deeper into the performance data, NVDA has recorded an earnings-driven after hours gain in 18 quarters. It has reversed direction in the following day's regular session nine times, or 50% of the time. While the broader historical data favors a widening move in NVDA shares Friday, the mixed data on upside trades would have us at least wary of betting too heavily on outsized gains beyond Thursday's after hours jump. Morning longs may want to target possible upside entry points between 14.75 and 15.20, a tentative floor support that developed Thursday evening. On the short side, sellers were most active Thursday night off the 16 level down to 15.70, a potential near-term ceiling to watch.

Nordstrom (NYSE:JWN) advanced 3.8% to 43.95 in Thursday's after hours session on the back of better-than-expected Q2 results and in-line guidance. JWN spiked to an early after hours high of 44.71 before retreating to hold still upside levels between 43 and 44 through the bulk of its evening trade. A pre-market open Friday may have potential surrounding the 43.75 area. JWN shows a mixed performance between its extended-hours action and the next day's regular session, cutting back or reversing its evening performance in next-day trade for eight of its last 18 earnings releases and extending its move in 10 quarters. In the near-term, the performance favors widening, which has been seen in three of four quarters. Looking deeper into the data, the stock has reacted to earnings news with gains in eight quarters, extending that move five times. The modest historical data favoring the long side for Friday would have us pegging a potential upside bet on the shares. Early longs may want to look for possible entry points between 43.26 and 43.55, an area where buy momentum was consistent Thursday night and where a possible floor support could develop. More risk tolerant longs may want to nibble at the shares closer to 43.55 to 43.75, levels that stood as a bottom support through the late after hours and where the issue could start the day Friday as it perhaps looks to retest the 44 mark.

Molycorp (MCP) jumped 7.7% to 58.35 in Thursday's night trading after topping Q2 expectations. MCP set off on a steady advance through the first-half of night trade, rising from 54.14 to a session high of 59.64. Sellers were aggressive off the top, dropping MCP down to still positive levels between 57.47 and 59.09. A pre-market open Friday may have potential near the 58 level. Buy liquidity was strongest Thursday night between 55 and 57.50, a potential near-term floor support for longs to watch early Friday and where there may be room to catch some bumps back toward 58 or above. More risk tolerant longs may want to test the waters closer to 57.50 to 58 as it looks more likely the issue starts early trade closer to this range and perhaps uses this area to push deeper north into the low- to mid-58s.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.