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Hot tech stock Nvidia has even more room to run, says technical analyst

VIDEO3:0803:08
Trader bets on a bounce for Nvidia

Nvidia has already surged more than 15 percent in the new year, and one trader is betting that the chipmaker has even more room to run.

While chip stocks have been on a tear, TradingAnalysis.com founder Todd Gordon has his eye on Nvidia in particular thanks to what he believes is a strong performance pattern for the stock.

"I like the technical setup of Nvidia," he said Thursday on CNBC's "Trading Nation." "You can see that we are well-contained in a parallel trend channel that originated in December and carried through to 2018."

Additionally, Gordon sees support for Nvidia at around the $217 level after a breakout, which used to be a resistance point from which Nvidia fell back in November. This breakout leads him to believe that should the stock dip, it could still bounce from the $217 level.

In advance of Nvidia's earnings report on Feb. 8, Gordon wants to sell the February monthly 220-strike put and pair that with the purchase of the February monthly 215-strike put. This would allow Gordon to collect a credit of $2.08, or $208, should Nvidia close above $220 on the Feb. 16 expiration.

But if Nvidia closes below $215 on expiration, then Gordon could lose $285. While Nvidia was trading at $224 on Wednesday, the trader wants to establish a point at which to step out.

"If the support at about $217 is broken, the reason for being in this trade is wrong," he said.

Nvidia has soared 118 percent in the past year.