the company refused to provide preliminary earnings
| | | | | | | | | PROSPERITY PUB MARKET TALK
Is The Honeymoon Over With SMCI?
SMCI has been a darling for investors in 2024.
The company, known for building high-powered servers using Nvidia (NVDA) hardware, saw its stock soar a staggering 270% from the start of the year to a peak of $1229 on March 8th.
This incredible run-up was fueled by investor enthusiasm for the booming cloud computing and artificial intelligence markets.
But, the fairytale romance may be showing signs of strain.
Since its March peak, SMCI has experienced a period of volatility. Initial sideways trading gave way to a series of lower lows, finally building to a dramatic one-day drop of over 20%.
This single-day mega plunge came after the company broke with its usual tradition of providing preliminary earnings results.
Investors, interpreting this as bad news, sold off their shares in droves… Though trading volume during the sell-off was lower than during the buying frenzy earlier in the year, which may indicate that this was just a “shakeout” of weak hands.
Since the one-day drop, SMCI has been steadily recovering, gaining 26% from its April 22nd low of $671. It has encountered resistance at key levels around $806, which it worked through. Though it is now bumping its head on the $860 level, which could be a sign that some investors are hesitant to jump back in whole-heartedly given the recent volatility and change from SMCI’s usual pre-earnings guidance.
But the wait won't be long. SMCI is scheduled to report earnings this coming Tuesday, April 30th after the market closes.
This report will be a critical test for the company and may even have repercussions for other chip and AI-related companies.
Strong earnings, particularly if accompanied by positive forward guidance, could reignite the investor love affair. On the flip side, a disappointing report could trigger another sell-off, raising questions about whether the honeymoon with SMCI is truly over.
— The Prosperity Pub Team
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| Set The Trade… Then Walk Away!?
What kind of trader would set a trade and walk away without checking on it obsessively?
Ever felt the stress of constantly checking on your trades?
One trader has developed a way to “set and forget” your trades… and the best part? Often the underlying stock only has to move 1% to capture double digit targets!
Click here to discover the power of Automated Options! | | | | |
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| SCOTT WELSH’S ANATOMY OF A GREAT TRADE
Anatomy of a Great Trade: GME
Before the insanity, before humans lost their gosh-darned minds, GameStop (GME) was a simple Deep Value stock.
That’s how it started.
Back in the day, Michael Burry (of Big Short fame) thought GME was undervalued and took a public position.
Was it undervalued?
Absolutely.
On 6/5/19, GME gapped down big. That gap down to $1.37 took it down below its lower Band and took price far away from “fair value” up around $4.80 (using the 800 SMA).
If the company wasn’t going under, there was a monstrous amount of potential upside.
Did it get back to “fair value”?
Yes and no. And oh my.
On 9/23/20, GME hit its “fair value” moving average line, which is fine to use as an exit. At that point, the price was at $2.72.
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By buying at deep value, we could’ve made 98.5%--even though it wasn’t at our original “fair value” target level (from the time we took the trade).
But doubling our money in a little over a year isn’t bad.
And if we held on even after reaching our target?
Yikes.
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GME went all the way up to $120.
As it turns out, GameStop was a Deep Value trade on steroids.
Who knew?
Happy trading,
Scott | | | | |
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PROSPERITY PUB MARKET TALK
Is The Honeymoon Over With SMCI?
SMCI has been a darling for investors in 2024.
The company, known for building high-powered servers using Nvidia (NVDA) hardware, saw its stock soar a staggering 270% from the start of the year to a peak of $1229 on March 8th.
This incredible run-up was fueled by investor enthusiasm for the booming cloud computing and artificial intelligence markets.
But, the fairytale romance may be showing signs of strain.
Since its March peak, SMCI has experienced a period of volatility. Initial sideways trading gave way to a series of lower lows, finally building to a dramatic one-day drop of over 20%.
This single-day mega plunge came after the company broke with its usual tradition of providing preliminary earnings results.
Investors, interpreting this as bad news, sold off their shares in droves… Though trading volume during the sell-off was lower than during the buying frenzy earlier in the year, which may indicate that this was just a “shakeout” of weak hands.
Since the one-day drop, SMCI has been steadily recovering, gaining 26% from its April 22nd low of $671. It has encountered resistance at key levels around $806, which it worked through. Though it is now bumping its head on the $860 level, which could be a sign that some investors are hesitant to jump back in whole-heartedly given the recent volatility and change from SMCI’s usual pre-earnings guidance.
But the wait won't be long. SMCI is scheduled to report earnings this coming Tuesday, April 30th after the market closes.
This report will be a critical test for the company and may even have repercussions for other chip and AI-related companies.
Strong earnings, particularly if accompanied by positive forward guidance, could reignite the investor love affair. On the flip side, a disappointing report could trigger another sell-off, raising questions about whether the honeymoon with SMCI is truly over.
— The Prosperity Pub Team
Set The Trade… Then Walk Away!?
What kind of trader would set a trade and walk away without checking on it obsessively?
Ever felt the stress of constantly checking on your trades?
One trader has developed a way to “set and forget” your trades… and the best part? Often the underlying stock only has to move 1% to capture double digit targets! Click here to discover the power of Automated Options! SCOTT WELSH’S ANATOMY OF A GREAT TRADE
Anatomy of a Great Trade: GME
Before the insanity, before humans lost their gosh-darned minds, GameStop (GME) was a simple Deep Value stock.
That’s how it started.
Back in the day, Michael Burry (of Big Short fame) thought GME was undervalued and took a public position.
Was it undervalued?
Absolutely.
On 6/5/19, GME gapped down big. That gap down to $1.37 took it down below its lower Band and took price far away from “fair value” up around $4.80 (using the 800 SMA).
If the company wasn’t going under, there was a monstrous amount of potential upside.
Did it get back to “fair value”?
Yes and no. And oh my.
On 9/23/20, GME hit its “fair value” moving average line, which is fine to use as an exit. At that point, the price was at $2.72.
By buying at deep value, we could’ve made 98.5%--even though it wasn’t at our original “fair value” target level (from the time we took the trade).
But doubling our money in a little over a year isn’t bad.
And if we held on even after reaching our target?
Yikes.
GME went all the way up to $120.
As it turns out, GameStop was a Deep Value trade on steroids.
Who knew?
Happy trading,
Scott
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