Buy This Tech Stock Before Its Next Leg Higher

Shares of technology concern Nvidia Corporation (NASDAQ:NVDA) notched a record high of $251.97 on Feb. 21, but have since pulled back to stage a successful test of their rising 40-day moving average. If past is precedent, it could be time to bet on NVDA's next leg higher, as previous retreats to this trendline have had bullish implications for the stock.

According to Schaeffer's Senior Quantitative Analyst Rocky White, there have been 11 other times in the past three years that Nvidia stock has come within one standard deviation of its 40-day trendline, after a lengthy stretch above this moving average. NVDA went on to average a one-month gain of 9.7%, ending positive 73% of the time.While the tech stock was last seen 0.2% lower at $241.40, another 9.7% gain would put NVDA around $264.82 -- in record-high territory -- within the next month.

This would certainly please options traders, who have been accumulating bullish bets over bearish at an accelerated clip recently. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows NVDA with a 10-day call/put volume ratio of 1.68, ranking in the 77th percentile of its annual range.

Likewise, Nvidia stock's Schaeffer's put/call open interest ratio (SOIR) of 0.89 ranks in the 10th annual percentile. This low ranking suggests that short-term speculators have rarely been more call-skewed toward the stock during the past 12 months.

Those wanting to bet on NVDA's near-term trajectory with options are in luck, too. While the stock's 30-day implied volatility skew of 7.6% ranks in the 93rd annual percentile -- suggesting calls are pricing in lower volatility expectations than puts -- the equity's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 90 out of 100. This indicates that the options market has consistently underpriced NVDA shares' ability to make big moves during the past 12 months.