Reversal continues?

Prospero.Ai 7/15/24 Trading Letter

Wanted to do a little intro on SMCI here beacuse it is a good lessson. After our call about “good losses” the universe definitely punished us because we made what looked like a dumb mistake. We didn’t check the news. SMCI was added to the NASDAQ 100 which should be a very positive news story.

But despite opening up the day on a great note it has since slowed down significantly. It reversed course on a dumb story. Susquahana reiterated its Sell rating but raised the price target from $275 to $325. Which is a silly reason for the stock to go down but it shows how easy it is to spook momentum traders sometimes. $325 is not a serious price target. A $325 price target puts them at a P/E ratio of 17 which is not real, just a price target that is attempting to help out shorters. It should not move the market. But you can see how complex these things are sometimes!

If you get the paid investing letter it will be similar content so we are bringing the new content to the top! See below for the explanations of these moves