This is Scott a StockMarketMentor.com and your Chart of the Day. I want to take a look at some weed stocks ( NYSEARCA: MSOS ).

This is a collection of US cannabis operators. A lot of those operators trade over the counter and so this is a nice vehicle if you don’t want to trade OTC stocks. Now, as a lot of you know if you have been following the cannabis space, it’s been a dark place for a long, long time. MSOS ( NYSEARCA: MSOS ) launched here in 2020, it ran up, and then with the rest of the market it kind of puked and did it for a long time.

It’s been a bit of an ugly trade, one that you’ve really wanted to avoid at least until September of last year when it started to firm up and really chopped around this black line, that’s the 200-day moving average. I’ve talked about MSOS ( NYSEARCA: MSOS ) before. I think I traded this a few times but ultimately traded out of it.

One thing that really catches my eye is the fact that the stock market, the general stock market, SPY ( NYSEARCA: SPY ) is down today, but MSOS ( NYSEARCA: MSOS ) is up. That’s not all, we are also seeing strength in MJ ( NYSEARCA: MJ ), which is another cannabis ETF. It’s holding up right around this 50-day moving average.

So I definitely think these stocks should be watched right now. And I definitely would want to define my risk on this, at least to around that 8.50 range. That’s the swing low of this recent active sequence. I would want to see, definitely a higher high, with a break above, let’s say, 9.58-9.60, hold above these moving averages, and have that 50-day curl up;

And then eventually you would want to move that stop up and make sure you take that risk off the table, if possible, just in case we get some negative news about this sector and it rolls over and maybe comes down here into this 200-day moving average zone.

That’s just one way I’m looking at some of the cannabis stocks here right now. I know there’s a lot of positive news headlines, potentially with legalization around the United States. If that happens, then this could be the trade to be in.

This is Scott with StockMarketMentor.com and your Chart of the Day. I want to take a look at Super Micro Computer ( NASDAQ: SMCI ).

SMCI ( NASDAQ: SMCI ) is showing a lot of relative strength here, versus the rest of the market. If you look at the triple Q’s ( NASDAQ: QQQ ), it’s down under that 50-day moving average. But if you look at the semiconductor index ( NASDAQ: SMH ) it’s actually holding near its 50-day moving average and hasn’t closed below.

So there is some definite strength bubbling under this market volatility right now in the semiconductor space, and SMCI ( NASDAQ: SMCI ) is just one of those stocks with some outperformance today. If I zoom in we can see, SMCI ( NASDAQ: SMCI ) is in a nice consolidation pattern, above all the major moving averages.

We have a clear downward-slopping trendline, right there, right there, right there. And then we have a clear little base of support right there. We actually made a low here on SMCI ( NASDAQ: SMCI ) near the end of March. But then, we made a higher low here in the first couple of days in April. And so market participants were actually forced to reach higher, even on this market weakness.

We had a low and a higher low, and now we have an upside follow-through with a daily higher high on the chart. Now, if market conditions were better I’d say, this looks buyable today. In fact, it probably is buyable today. But because of the market volatility, you probably want to manage your size in this environment.

What I want to see from SMCI ( NASDAQ: SMCI ) is follow-through. I want to see this make another higher high, and maybe test some of these recent highs, like up here at around $1,050.00. Now, keep in mind that SMCI ( NASDAQ: SMCI ) does have earnings coming up at the end of April, April 30th.

So if you take this idea, as a trade, at your own risk, just keep in mind earnings are coming up. And if you don’t have a cushion in a position leading into earnings, it can lead to disaster. So make sure you build enough of a cushion to hold into earnings. And if you don’t, then I usually sell before earnings and then just say, well, if it pops up I’ll buy it back tomorrow.

You’ve been able to do this here with SMCI ( NASDAQ: SMCI ), where it has positive earnings. It gaps up the next day, sells off, and actually offers you another entry. And so, I recommend, that if you don’t have a cushion with any position, sell it, wait until the next day, and just look for a new entry.

That’s what I would think here on SMCI ( NASDAQ: SMCI ). I think you could probably swing this to try and touch some of these recent highs, like up here at 1,050.00, maybe 1,100.00, or something like that for a short-term trade.

At that point, maybe you get a little bit of a pullback and a retest of this move. And then you are off to the races again, if it offers a new entry. Now, I definitely think we are in a swing trading market right now just because of the market volatility.