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December 5, 2024

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When going through your morning trading routine, you’re likely to tune into the news for unfolding events, run technical scans, check sentiment and breadth indicators, and utilize any other tool that can provide a snapshot of what’s going on “now” before or during the market’s opening hours. After all, each day presents something new.

But what if a stock makes headlines for an unusually massive jump due to a significant news event? How might you go about assessing the favorability of that stock amid a rush of stampeding bulls? That was the case Monday morning with Super Micro Computer Inc. (SMCI).

On Monday morning, December 2, SMCI claimed the top position in StockCharts’ Market Movers tool, featured on the Dashboard. The ranking highlighted SMCI as the most actively traded stock across the S&P 500 and NASDAQ, as illustrated below.

FIGURE 1. MARKET MOVERS PANEL FOR NASDAQ ON DECEMBER 2. SMCI was the most actively traded stock in the S&P 500 and the Nasdaq.Image source: StockCharts.com. For educational purposes.

Can SMCI Stock Recover After Its 85% Plunge?

Typically, when analyzing a stock that’s performing relatively well, you’d compare it to a benchmark like the broader market (S&P 500) or its sector, checking various breadth indicators to see how the stock and its benchmarks are performing.

SMCI’s dramatic underperformance renders traditional comparisons to benchmarks unnecessary. Yes, it was that bad. Once a high-flying AI stock, SMCI made headlines after plummeting 85% just weeks ago amid concerns over its financial integrity. While this event grabbed attention, the stock has been on a steady downward trend since the start of the year.

Despite this, on Monday, shares jumped about 29% after a special committee reaffirmed that there was “no evidence of misconduct” by the company. This was enough to ease investor fears despite the risks that might still weigh on the stock. Given the dramatic surge, the news likely spurred many bullish investors to seize the opportunity, betting on a rebound at “bargain basement” prices.

However, “not so fast,” as a daily chart of SMCI would indicate.

FIGURE 2. DAILY CHART OF SMCI. The day’s impressive surge may not look so optimistic when viewed from a larger context.Chart source: StockCharts.com. For educational purposes.

Look at the volume spike coinciding with Monday’s price surge (magenta rectangle). Both may be slightly notable relative to previous sessions. In the bigger picture, though, it’s not a remarkable event. What stands out, however, is the resistance level near $50 (indicated by the blue dotted line) and the Stochastic Oscillator‘s “overbought” reading (marked by the magenta circle), suggesting that momentum may soon slow. In short, watch what the price does at that level.

But let’s suppose that the current reversal eventually sustains itself and breaks above resistance at $50. The next step would be identifying potential price targets or reversal points ahead. Additionally, it’s important to monitor key longer-term indicators for further confirmation.

How to Trade SMCI Stock: Entry/Exit Points and Price Targets

Let’s switch over to a weekly chart.

FIGURE 3. WEEKLY CHART OF SMCI. The significance of historical volume is quite telling in this chart. The $20 and $90 price ranges have seen the highest trading volumes.Chart source: StockCharts.com. For educational purposes.

If the price breaks above the immediate resistance level at $50, the next key levels to monitor are $65, $95, and $120 (its all-time high). These levels, indicated by dashed blue lines, could serve as potential points for profit-taking, resistance, or reversals, depending on the broader technical and fundamental context. In short, these are your potential price targets. A break above $50 would make for a favorable entry point, and a good stop-loss level would be at $41, marked by the magenta dotted line, as it served as support from September through October.

A key indicator to watch if price breaks above $50 is the Chaikin Money Flow (CMF). Ideally, you would want to see the CMF rise above the zero-line, as it would indicate that buyers are taking control of the stock, suggesting volume-driven buying pressure that might be adequate enough to lift the stock higher. If SMCI falls before breaking above $50, what’s the likelihood of another bounce at $20, forming a double bottom?

While SMCI’s bounce is a foggy mix of fundamental speculation, leading SMCI bulls to trade technically until more definitive information on the company’s prospects becomes clearer, the Volume-by-Price indicator offers some valuable insight. A Volume-by-Price analysis suggests that the $20 and $90 price ranges have experienced the highest trading volumes. This means that these ranges might serve as significant support and resistance levels, respectively, due to heavy trading concentrated at these prices. So, if SMCI’s price declines, it is likely to find support once again at the $20 level.

At the Close

SMCI’s dramatic 29% rebound drew much attention, but you should approach such euphoria cautiously, tempering the optimism with technical reality. The Market Movers tool is useful for drawing attention to stocks experiencing the highest levels of trading volume and the biggest percentage gainers and decliners. But just because you see a bull rush doesn’t mean you should immediately jump into the fray. Watch the key levels discussed above and if SMCI signals an entry, set your sights on the targets and set your stops as well. If SMCI trends higher, consider trailing your stops higher to reduce your losses or ensure your profits.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Thirteen women from the Philippines have been convicted on human trafficking-related charges for acting as surrogates in Cambodia for a ring selling babies to foreigners for cash.

The women were each sentenced to four years in prison after being found guilty of selling, buying or exchanging a person for cross-border transfer, the Kandal Provincial Court said late Monday.

According to the verdict, two of the four years in prison were suspended, meaning they won’t have to be served unless they’re found guilty of another crime.

The women are held at a police hospital outside Phnom Penh, the Cambodian capital, and authorities have previously said they would not have to serve prison time until after giving birth.

The women can appeal the verdict, said court spokesperson So Sarin. He refused to comment on how many were still pregnant, or what would happen to the babies after they have given birth.

Developing countries have been popular for surrogacy because costs are much lower compared to the United States and Australia, where surrogate services could cost around $150,000.

The Cambodia case was unusual because surrogates normally are employed in their own countries, not transported elsewhere.

Authorities have said the business that recruited the women was based in Thailand, and that their food and accommodation in Cambodia was organized there.

The women were arrested in late September in a raid on a villa in Kandal province, where authorities found 20 Filipinos and four Vietnamese.

At the time the women were charged in October, Cambodia’s Interior Ministry said the ringleaders had not been identified. It said, however, that it considered the women offenders who conspired with the organizers to act as surrogates and then sell the babies for money, rather than victims.

Eleven of the women who were not pregnant were deported, and the 13 Filipinos were charged under a provision on Suppression of Human Trafficking and Sexual Exploitation. The law was updated in 2016 to ban commercial surrogacy after Cambodia became a popular destination for foreigners seeking women to give birth to their children.

Cambodia has a bad reputation for human trafficking, especially in connection with online scams in which foreigners recruited for work under false pretenses are kept in conditions of virtual slavery and help perpetrate criminal fraud online against targets in many countries.

The surrogacy business boomed in Cambodia after it was put under tight restrictions in neighboring Thailand, as well as in India and Nepal.

In July 2017, a Cambodian court sentenced an Australian woman and two Cambodian associates to 1 1/2 years in prison for providing commercial surrogacy services.

This post appeared first on cnn.com

Art Cashin, UBS’ director of floor operations at the New York Stock Exchange and a man The Washington Post called “Wall Street’s version of Walter Cronkite,” has died. He was 83 and had been a regular on CNBC for more than 25 years.

In the intensely competitive and often vicious world of stock market commentary, Cashin was that rarest of creatures: a man respected by all, bulls and bears, liberals and conservatives alike. He seemed to have almost no enemies.

He was a great drinker and raconteur, a teller of stories.

For decades, he assembled a group of like-minded friends every day after trading halted, first at the bar at the NYSE luncheon club, then across the street at Bobby Van’s Steakhouse, where the group came to be known as the “Friends of Fermentation.” His drink was Dewar’s, always on the rocks.

Cashin’s success was attributable to a combination of charm, wit, intelligence, and a stubborn insistence on refusing to adopt many of the conveniences of the modern world. He was a link to an NYSE tradition. Every year, on Christmas Eve and New Year’s Eve, he led the singing of the 1905 song “Wait ’Till the Sun Shines, Nellie.”

Cashin refused to use credit cards and paid for everything, particularly his voluminous bar bills, with cash, saying he cherished his anonymity. He never learned to use a computer–his notes were hand-written and then sent to his assistant. For years, he used an obsolete flip phone that he rarely answered.

His desk was piled high with papers he had accumulated over the decades. At times, it resembled a recycling facility.

Cashin’s suits were usually rumpled and his ties were always obsolete.

However, neither his appearance nor his attitude was haphazard. It was part of a persona that was carefully constructed over more than 50 years on Wall Street.

Arthur D. Cashin Jr. was born in Jersey City, New Jersey, in 1941. His parents were superintendents of an apartment building. His business career began in 1959 at Thomson McKinnon, a brokerage firm, when he was 17 and still in high school. Cashin had been obliged to join the workforce when his father died unexpectedly that year.

In 1964, at age 23, he became a member of the NYSE and a partner of P.R. Herzig & Co.

At that time, the vast majority of all trading took place on the NYSE floor. Cashin’s early memories revolve around the noise of thousands of brokers shouting at each other. He claimed to be able to tell if the market was moving up or down by the pitch of the screaming, because sellers sounded panicky. “And so if the pitch of the noise was high, I would know the sellers were headed my way. Or if it was a rumble, I would know that it was probably buyers coming,” he said in a 2018 interview.

In the mid-1970s, disgusted by the corruption in his hometown of Jersey City, Cashin ran for mayor. “I think I ran 12th in a field of five,” he said. “But once they discovered I was honest, there wasn’t much chance I was going to get elected.”

He returned to Wall Street. In 1980, he joined PaineWebber and managed its floor operation, continuing to do so after PaineWebber was bought by UBS in 2000.

Then came 2001.

Cashin would often recall what it was like to escape from Ground Zero on Sept. 11, 2001, after terrorists crashed two jetliners into the World Trade Center towers, killing more than 2,600 people in the heart of the nation’s financial center.

“Many of us got out that Tuesday walking through streets onto which ash, smoke and business envelopes fell snow-like, blocking both your view and your breathing,” he wrote in a commentary 13 days later. “Yet when a stranger was met, they were invited to join the convoy and offered a spare wet cloth (carried in pockets) through which to breathe as they walked. When we reached the East River (Brooklyn side of Manhattan), there was a volunteer group of tugboats, fishing boats and mini-ferries that looked like the evacuation of Dunkirk. No charge. No money. Just — “May I help you!” No one got anyone’s name. No thank you cards will be sent. But Americans — even New York Americans — who freely give to strangers but argue with neighbors were suddenly one group. In the days since, as we wander via new strange ways back to Wall Street, we all internalize the survivor’s quandary. We are lucky to be alive — but why us.”

After the Sept. 11 attacks, Cashin chaired the NYSE “Fallen Heroes Fund,” which provided millions of dollars to the families of first responders killed in the line of duty.

Though he was a respected market historian, he was most renowned as a storyteller for the stock market. He was a meticulous observer of fundamental and technical trading patterns but never let data get in the way of explaining the market in a folksy manner that made it accessible to even casual observers. He often spoke of Wall Street as a community of people with many different opinions. In his world, the bulls and bears would fight it out every day, as if it were all a John Wayne Western: “The bulls are circling the wagons, trying to defend the highs” was a common refrain.

His daily market commentary, Cashin’s Comments, was distributed to clients continuously for more than 40 years and was widely read on Wall Street. It invariably began with an analysis of an important event that occurred on that date (“On this date in 1918, the worldwide flu epidemic went into high gear in the U.S.”), and after a brief history lesson tied that event to the day’s market events (“Pre-opening Wednesday morning, U.S. stock futures looked like they might be coming down with the flu. Several earnings reports were less than glowing and some of the outlooks were cloudy”).

He was a keen observer of human behavior, a behavioral psychologist long before the word was coined. He had seen his fellow humans panic time after time, and had seen the effects of succumbing to the initial desire to sell immediately without thinking. “It tells me that people have a tendency to overreact — and to not think things through carefully,” he said. “And you break up, again, into two sets of people, those who look with some suspicion at events, and others who say, ‘Oh, I’ve got to react to that.’ Those who react immediately rarely do well. Those who are somewhat suspect, they do much better.”

He had two great loves in his life: his family and the New York Stock Exchange. In the age of computerized trading, the fabled NYSE trading floor still survives, though in greatly diminished form. When it was closed during the Covid pandemic, he said he was “disappointed … but it was understandable.” 

Cashin was philosophical when asked about the rise of electronic trading, which has slowly but surely eroded the influence of that floor. “I miss those magnificent days when your spirit hung on the fact that you were good for your word or you’re outta here,” he once said at Bobby Van’s, but admitted that electronic trading had improved the speed and accuracy of trading, particularly recordkeeping.

Among his many friends, he will perhaps be best remembered for his modesty. He seemed genuinely puzzled about his popularity. “People have an interest in — in Arthur Cashin. I can’t fully understand why,” he said.

And when The Washington Post ran a long profile of his career in 2019, calling him Wall Street’s version of CBS newsman Cronkite, he quipped: “I think I owe an apology to Walter Cronkite.”

In lieu of flowers, the family kindly requests donations be made to the Arthur D. Cashin Jr. Memorial Scholarship at Xavier High School. Contributions may be sent to Xavier High School, 30 West 16th Street, New York, NY 10011.

— CNBC’s Martin Steinberg contributed to this report.

This post appeared first on NBC NEWS