Here is an aggressive trade idea on Super Micro Computer ($SMCI)
This is Dan Fitzpatrick with your Chart of the Day. This has been a heck of a week for the market, things just continue to go up. We got a lot of cup and handles, they’re all over the place, and every single one of them is really good.
I thought I’d mention SMCI ( NASDAQ: SMCI ), this isn’t a cup and handle. This is a squeeze and a pop like you can’t believe. This just keeps moving higher and higher. It’s an AI play, it is an NVIDIA ( NASDAQ: NVDA ) play, they make stuff in that sector.
SMCI ( NASDAQ: SMCI ), what are we going to do? Well, if you missed this move I think you’ve got another one coming. I just put this on just a little while ago, markets closed, and my idea here on this is, that this has had one heck of a move in a fairly short period of time. It is up over 200 percent in not too many days, not too many days at all, 4 weeks, 21 bars, it came up to here.
And then, what’s been happening since that time? The volume has been going down. We had this big massive spike on volume. This is institutional buying, you can see the average volume going way up. This is institutional buying, that’s the only way you would have this kind of volume, and this kind of price advance. And then on the pullback, it just didn’t come back that much, it didn’t come down that much, relative to this big move.
This is one I think you just have to get in there and hold on to it. I do not believe that buying at 1019.00 is a bad idea. You are anticipating continued moves to the upside, but the stock is giving you that sense, that it is under institutional accumulation. You can see though, because the stock is so volatile, it is like any stop is going to be too tight, it just is.
And so the way you protect yourself on this is through a proper position size. I have my suggested stop down here, that’s a pretty berth. The way you manage that is, not to own as many shares. And then as the stock works in your favor, then you can start building a bigger position because you’ve got some room. You’ve got a little horsepower to put on a bigger position with profits, as opposed to just white knuckles.
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