Nvidia Earnings Set to Test Market's Limits in Asymmetric Setup

Nvidia's upcoming earnings report is expected to have a significant impact on the market, particularly due to its technical charts and options positioning.

The company has been facing resistance at $230, with support levels at $212 and below $210, where there is little until around $190.

This 'positive gamma regime' means that market makers' hedging pushes back on rallies and buys dips, supporting the stock. However, if the stock gets too far below the flip zone, say under $210, gamma could turn negative and hedging flows would become directional.

Nvidia's history suggests a beat is not a surprise, with the options market looking for about six percent this quarter. However, given the company's recent performance, big upside through options may not be rewarded here.