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Incoming 40% correction for Super Micro Computer, Inc.

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On the above 4 day chart price action has rallied 270% since January. And 3000% !!! since June 2022. It is somewhat unfortunate to see so many long ideas at the moment.

Motley Fool June 30th:

“1 Top Artificial Intelligence (AI) Stock to Buy Before It Soars 70%, According to Loop Capital”
“Loop Capital thinks Supermicro is going to $1,500”

Madness.

Why bearish?

Broken market structure. It is very clear to see, price action has broken the last higher low AND confirmed it as resistance. You can see this more clearly on the daily chart below.

Double top bearish divergence. On the 3 week chart below price action prints a RSI lower high (red arrows) with a higher high in price action. On this time frame an important trend shift is indicated.

Is it possible price action continues to rise? Sure.
Is it probable? No.

Ww

1 day broken market structure

3 week bearish divergence

注释

I’m asked:

“Volatile day today. How do you see today's move impacting your analysis above?”

I'm not that kind of analyst, one who reacts to daily price action. That’s for the herd. There’s too many charts published by myself to keep up with day to day volatility, you must have your own plan. Instead what I’m doing, in particular with stocks, is looking for macro shift, events to come.

On the 3 month chart below momentum is falling (black circles) there is no question of that. Can price action go up higher? Sure. But consider the risk.

The last time momentum bled a 76% correction followed after a 340% rally.

We have just seen a 12,000% rally without stock splits. Yes you read that correctly, since 2019! And yet tradingview is full of long macro ideas. It is incredible. “New bull market to begin” they say. The mind boggles.

A 90% correction today still leave you with a 800% return from 2019.

交易开始

Price action comprehensively confirms past support as resistance.

"Chip stocks tumble as Trump comments rattle investors"
ft.com/content/6bc103f8-b6ba-4137-beae-6222827b297f

注释

Everyone is looking for the exit... problem with that is you need a greater fool.

交易开始

A very convincing resistance confirmation today. Should the month close below 780... take precautions.

注释

The advertised 40% collapse in price action on the main chart seems imminent.

Do not try to catch a falling knife, a consolidation period lasting some years will follow.
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交易开始

10% correction post market close. 30% drop since publishing. 10% to go.

If price action drops below 500 with weekly candle closes, expect a following 40% correction.

交易结束：到达目标

Boom, 40% correction.