Catching SMCI At $31 (not a typo)

Anatomy of a Great Trade

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FEB 23, 2024       SCOTT WELSH’S ANATOMY OF A GREAT TRADE Anatomy of a Great Trade: SMCI There are two huge factors in catching a massive breakout winner. The first is finding the stock.  That’s a big topic for another time.  But let’s assume that we’re tech-aware traders and that Super Micro Computer Inc. (SMCI) was on our radar. At that point we need the second factor: a systematic way to trade.  Back in 2013, SMCI made a big move.  On a monthly chart, it closed above the 12-month simple moving average (SMA) twice in a row. That’s our entry. Then it went from $13 to $28. We finally exited on a close below the SMA. See that here on the left side of the chart:   Remember, once a stock makes a 100% move, it’s likely to do it again. Except SMCI didn’t do it again. Not for a long, long time.  From 2016-2021, it didn’t go anywhere.  But if we didn’t give up, there was yet another signal in January of 2021. It would’ve entered us at $31.80:   How did that trade turn out?   Holy moly. SMCI is now at $894 and we hypothetically would still be in (because it never closed below the SMA).  The monster trades are out there. As long as we don’t give up and trade them according to our system. Happy trading, Scott P.S. As a reminder, these historical lookbacks are based on my longer-term Weinstein Stage Analysis method. The charts above use monthly candles and a 12 month simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45. Additionally, the teal lines on the chart show the profitable runs. Unlock the 8-Day Trading Secret! Discover a phenomenon that has sent specific stocks soaring in just 8 days… bringing double and even triple digit gains in just over a week! It's not just a trade, it's a monthly phenomenon! Get ready for the next big surge! PROSPERITY PUB RETRO REWIND Market Deja Vu: NVDA Looks A Lot Like CSCO Jeffry Turnmire has been having a lot of nostalgia lately. But he’s not bringing back bell bottoms or disco balls The nostalgia he's been having is related to Nvidia's (NVDA) meteoric rise over the past year. He's seen this show before — and it doesn't end well. Just yesterday, NVDA added the value of a whole Netflix (NFLX) to its market cap. But don’t cheer — as we said, he's seen this train wreck play out before. Specifically, he's been recalling a similarly meteoric rise by Cisco (CSCO) in the late 90s and early 2000s. The stock hit a high of $82, which nowadays sounds like nothing. But it was briefly the biggest company in the world. (and we do mean BRIEFLY) Think back to that time. Internet mania was at a peak. The DotCom bust hadn't hit yet. Just like AI, everyone knew the internet was going to be big. But just like with the current AI mania, everyone seemed to think that the internet could only run on Cisco. And as long as everyone believed that "truth", the stock kept going up. Until it didn't. Take a look at a chart:   Cisco fell as fast as it rose — faster, actually… And although it’s been almost 25 years, it’s never even come close to approaching its peak. The lesson? There are several: • There are very few companies that have an actual “moat” around their business.   • For a while everyone thought Cisco was special, then the competitors came.   • The competitors that ultimately are Cisco’s lunch were small, little-known companies.   • As Jeffry always says: “The market can remain irrational longer than you can remain solvent.” Best not to try to short this one. At least not yet. And probably most importantly:   • It's easy to feel like you're missing out, but there are plenty of other trades out there that don't require you to buy into an increasingly obvious bubble. When this one pops, it could take decades to come back. Do you have time to wait until 2050 and beyond? — The Prosperity Pub Team

FEB 23, 2024 SCOTT WELSH’S ANATOMY OF A GREAT TRADE Anatomy of a Great Trade: SMCI There are two huge factors in catching a massive breakout winner.   The first is finding the stock.    That’s a big topic for another time.    But let’s assume that we’re tech-aware traders and that Super Micro Computer Inc. (SMCI) was on our radar.   At that point we need the second factor: a systematic way to trade.    Back in 2013, SMCI made a big move.    On a monthly chart, it closed above the 12-month simple moving average (SMA) twice in a row. That’s our entry.   Then it went from $13 to $28. We finally exited on a close below the SMA. See that here on the left side of the chart:   Remember, once a stock makes a 100% move, it’s likely to do it again.   Except SMCI didn’t do it again. Not for a long, long time.    From 2016-2021, it didn’t go anywhere.    But if we didn’t give up, there was yet another signal in January of 2021. It would’ve entered us at $31.80:   How did that trade turn out?   Holy moly.   SMCI is now at $894 and we hypothetically would still be in (because it never closed below the SMA).    The monster trades are out there.   As long as we don’t give up and trade them according to our system.   Happy trading,   Scott P.S. As a reminder, these historical lookbacks are based on my longer-term Weinstein Stage Analysis method. The charts above use monthly candles and a 12 month simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.   Additionally, the teal lines on the chart show the profitable runs. Unlock the 8-Day Trading Secret!   Discover a phenomenon that has sent specific stocks soaring in just 8 days… bringing double and even triple digit gains in just over a week!   It's not just a trade, it's a monthly phenomenon!   Get ready for the next big surge! PROSPERITY PUB RETRO REWIND Market Deja Vu: NVDA Looks A Lot Like CSCO Jeffry Turnmire has been having a lot of nostalgia lately.   But he’s not bringing back bell bottoms or disco balls   The nostalgia he's been having is related to Nvidia's (NVDA) meteoric rise over the past year.   He's seen this show before — and it doesn't end well.   Just yesterday, NVDA added the value of a whole Netflix (NFLX) to its market cap.   But don’t cheer — as we said, he's seen this train wreck play out before.   Specifically, he's been recalling a similarly meteoric rise by Cisco (CSCO) in the late 90s and early 2000s.   The stock hit a high of $82, which nowadays sounds like nothing. But it was briefly the biggest company in the world. (and we do mean BRIEFLY)   Think back to that time. Internet mania was at a peak. The DotCom bust hadn't hit yet.   Just like AI, everyone knew the internet was going to be big.   But just like with the current AI mania, everyone seemed to think that the internet could only run on Cisco.   And as long as everyone believed that "truth", the stock kept going up.   Until it didn't.   Take a look at a chart:   Cisco fell as fast as it rose — faster, actually…   And although it’s been almost 25 years, it’s never even come close to approaching its peak.   The lesson?   There are several: There are very few companies that have an actual “moat” around their business.   For a while everyone thought Cisco was special, then the competitors came.   The competitors that ultimately are Cisco’s lunch were small, little-known companies.   As Jeffry always says: “The market can remain irrational longer than you can remain solvent.” Best not to try to short this one. At least not yet. And probably most importantly:   It's easy to feel like you're missing out, but there are plenty of other trades out there that don't require you to buy into an increasingly obvious bubble. When this one pops, it could take decades to come back.   Do you have time to wait until 2050 and beyond?   — The Prosperity Pub Team

ABOUT US:  We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.  Please visit https://prosperitypub.com/terms-conditions/ for our full Terms and Conditions. Unsubscribe This email was sent to penunggangbadai.moneyblog@blogger.com by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States Prosperity Pub

ABOUT US:  We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.  Please visit https://prosperitypub.com/terms-conditions/ for our full Terms and Conditions.   Unsubscribe This email was sent to penunggangbadai.moneyblog@blogger.com by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States Prosperity Pub

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