Tesla
Tesla (TSLA) stock followed through on that support from the Tesla bulls recently, opening today’s trading more than 7% higher.
The spike higher was caused by Elon Musk’s tweet – can I still call it that? – stating that “currently passing by wide margins.”
David Faber of CNBC pointed out a few sticking points on the vote.
First, that the vote had not officially concluded, and that shareholders were still able to change their vote until that point. Later it was also reported by CNBC that “Ann Lipton, a corporate and securities law trial attorney who now teaches at Tulane Law School, said shareholders aren’t in a position to overturn the judge’s ruling.”
“Some people apparently believe (incorrectly) that a vote in favor will settle the legal disputes,” Lipton told CNBC in an email. “It won’t. It will make them more complicated.”
Shares of Tesla are trading just 3% higher in the afternoon as the story continues to develop. Investors should remember: the market hates uncertainty.
Tesla’s stock is still trading above its 20- and 50-day moving averages. These two trendlines should be considered the “canary in the coal mine” for whether Tesla will hold its recent rally.
Super Micro Computer
Super Micro Computer (SMCI) shares are trading 12% higher today as the last two days of earnings have shifted investors' attention to the next phase of AI.
AI services stocks like Super Micro Computer got a lift from Broadcom and Oracle’s earnings announcements over the last two days as these companies pointed to the booming demand for services to support growth in AI.
Over the long run, this will be how AI generates multiples of the wealth that has so far been focused on a small group of first-round infrastructure.
Super Micro Computer stock has been in a trading range for the last two months, causing the stock’s telltale 50-day moving average to shift into a bearish trend. That suggests that the stock is on pace to continue closing lower for the next few weeks.
That said, today’s move takes the stock back above that same critical trendline.
It’s too early to call an end to the bearish bias of Super Micro Computer’s 50-day trend, but two more closes above the same trendline will lure technical buyers into the stock. Traders should eye continued support at $750, which has been a solid bottom for shares since April.
SOFI Technologies
SOFI Technologies (SOFI) shares dropped 4% today after posting a strong performance on Wednesday.
Shares of the fintech company fell in the wake of Jerome Powell’s press conference recently where he stated the Fed only expects to drop interest rates once in 2024.
Wednesday’s rally, which also saw a spike in call activity on the stock, was part of the “hope” trade ahead of the Fed’s interest rate decision.
Investors took the lighter-than-expected inflation report to indicate that the Fed would engage in lowering interest rates sooner than previously indicated. That is not the case.
SOFI Technologies has been in a bearish decline for much of 2024 as consumer demand for loans has declined.
That decline is due to higher interest rates and tightening budgets as two years of inflation have worn consumers out. Watch for SOFI Technologies as it approaches $6.75; a break below this price will indicate a bearish price target of $5 for the stock.
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.