Three Stocks: Gold, Super Micro Computer, and Riot Platforms

Gold

Gold (GLD) prices dropped by 2.4% today, the largest drop in more than two years.

Shares of the GLD dropped more than 2% as traders adjust the price premium to account for less risk in the Middle East. The easing of tensions follows a relatively quiet week in the wake of Israel’s retaliation against Iran for their April 13 attack.

In addition, traders are also dropping prices based on a drop in the expectations that the Federal Reserve will drop interest rates by previous forecasts for 2024.

Historically, there has been an inverse relationship between gold and interest rates, meaning higher rates would pressure gold.

More than anything, the chart for gold is in play. GLD shares have rallied 10% since the beginning of April. April and March gained more than 13.5%, the best two month run since February 2016.

The massive run in gold dictates that a short-term correction is part of the longer-term trend. We’re likely to see support at $215 followed by $213 on the GLD shares.

A break below those short-term prices would target a move to $202.

gld stock chart

 

Super Micro Computer

Super Micro Computer (SMCI) shares have taken investors on a wild ride over the last month.

After hitting a new all-time high at $1,200, shares dropped to $900 in March, which is where they have seen a battle between short-term bulls and bears.

The stock made a fast run to $1,000 last week as support from its 20- and 50-day moving averages led technical traders to a potential shift in to the upside - but then came a solid blow.

On Friday, the company confirmed their April 30 earnings date without providing an update on the quarter’s revenue.

Updates had been given in the five previous quarters.

That move alone led the market to worst case the move by dropping the price of SMCI stock by more than 20% on heavy trading volume.

Round number support currently holds the stock at bay at $700, but recent selling has caused the short-term 20-day moving average to cross below the 50-day trendline. That move normally suggests that a stock’s price momentum is shifting, often targeting even lower prices.

My recent video on SMCI lays out the potential for the stock to see support at $600 and then $500 should the selling continue.

smci stock chart

Riot Platforms

Riot (RIOT) stock moved 22% higher on Monday, as the Bitcoin halving finally happened.

The halving occurred on April 20 and is a pre-programmed event designed to control the number of new bitcoins entering circulation. The halving rewards those holding bitcoin by creating scarcity for the digital asset.

Shares of RIOT and other cryptocurrency miners rallied on the halving news given their holding of the cryptocurrency. At the same time, from a fundamental perspective, mining new bitcoin moving forward will prove more difficult due to the improved scarcity.

Shares have been on a technical downtrend and teetering on trading in a bear market with a move back below $10.

A move into bear market territory would mark the first for the stock since January 2020. Shares declined 81% in the six months following the beginning of that bear market.

Target a return to $8.

riot stock chart

About the Author

Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.

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