Transcription
Hi, this is Kri Arac with Wicked Stocks, bringing you an individual stock pick: Super Micro Computer, symbol SMCI. I recorded this video on Tuesday, February 11th, 2025.
Let's take a look at the basic fundamentals, courtesy of Yahoo Finance. Market capitalization: 23 billion, pushing it into the large-cap, smaller large-cap range. Average daily trading volume: 69 million shares, averaged over the last three months. That's quite high for a smaller large-cap stock, pointing to the speculative element this stock brings. Quick moves and substantial gains are relatively common in a short period of time.
This is a weekly bar chart (same chart throughout). I'll open it up a bit to show you a convergence. There's a near-term channel top this week at 41.82, but more significant is the 44.76 descending channel top—in play for almost a full year of activity (a March high of 24). This trend-defining 44.76 may contain buying through March and well into the second quarter.
How far south can we fall? We're at around 41 bucks a share. Yes, we can fall, but this is a buy-side recommendation. If we close above 44.76 this week, we could see a 20% rally (stage one). This is a decent trade for swing traders. That 20% rally goes from 44.76 up to 54.35. Keep in mind that 44.76 is dropping $1.72 a week; next week it'll be 43.04, etc. That's your ceiling of resistance—sellable resistance for those playing both sides.
But if we close above 44.76, 54.35 is a 1-to-3 objective, and you could take profits there (near-term swing traders). Looking at the big picture, closing above that well-defined channel top at 44.76 suggests a full channel extension, presently well above the market at 94.36. I'm not expecting the market to go that high; that descending full channel extension converges into the low 80s with the 58 Fibonacci by the end of March. This could be a realistic play (a two-to-three or three-to-five-month category).
If we close above 44.76, it's not a doubling, but close—an 80-90% rally into the lower 80s. By the end of March, there's enough time for that to play out. That would be an aggressive rally; at worst, it would put us into June or July. That full channel extension at 94.36 is your primary target if we close above 44.76. It continues to drop $1.72 a week, something to watch. We'll update you on this; if we get the buy signal, it'll be part of our weekly update series. We may not update every week if there's nothing new to say, but we'll keep you apprised.
Once again, closing above 44.76: short-term, near-term swing traders can make a play up to 54.35 (rising 7 cents a week). That's the formation we'd expect (not necessarily the 54.35 number, but next week it'll be 55.05, etc.). Ultimately, over the next three to five months, that 94.36 full channel extension is in play. If, over the following several weeks or month or two, we close above 54.35, that's a clear acceleration to the upside. We could close above 44.76, tag 54.35, and then trade inside that widening wedge for some weeks before the market closes above 54.35. Once it does, a more accelerated rally to the full channel extension would be expected within one to three months, depending on volatility.
Until then, holding below the 44.76 channel top keeps a return to that 17.25 low from last November in play. I don't *expect* it, but the path of least resistance through the second quarter, holding below 44.76, remains downside. A retest of 17.25 wouldn't surprise me over the next two to three months. Holding below 44.76; closing above 44.76: a three-to-five-month rally into what is now 82.54 to 94.36 (narrowing and dropping as we continue through time). I think I'll leave it at that for this Wicked Stocks video analysis on Super Micro Computer. Have a great day.