Chart of the Week: American Superconductor
It’s time for our chart of the week. So let’s go ahead and take a look at this recent name that I’ve been following here and have been making some call plays on it. It’s called American Superconductor; AMSC is the symbol.
While a lot of attention has been drawn to NVIDIA, AMD, Super Micro, and some of these other names, a little company like this – American Superconductor – really climbs from below the radar and really comes to the scene and has really produced some great returns for shareholders. And you can see from back in November, early November, the stock was about $6 or $7. It’s now $20. So that’s sporting a more than 200% gain.
It just closed above resistance
But what really caught my eye on this stock last week actually was closing above this resistance line, which were the highs from the early part of March. It closed above there and actually came back and checked it, went above there for a couple of days – about $16 – came back and checked it, and it was fine – it didn’t close below there.
And then there’s three days here – we had earnings last week, Friday, and then yesterday on June 3 – the stock surged higher even when the markets were down. So that’s really great relative strength. And you can see the relative strength up here in the top is pretty overbought right now. And I know a lot of people would say, “Well Bob, that’s kind of dangerous to be buying in an overbought condition.”
Well remember: Overbought is not a reason to sell just like oversold is not a reason to buy. If you’re a momentum player like I am, you pay attention to these things, and you watch the momentum go up for these particular stocks.
Moving higher on good volume
So we had good volume over here. And again, what I really liked about this stock is the fact that it ran up nicely on good volume, making higher highs and higher lows, which is our textbook pattern for an uptrend. Money flow is strong and we do have MACD on a buy signal here.
How far is this stock going to go? I don’t know. Trim and trail as you move along if you’re holding this name.
I have some calls again – I’m out to July and August and so forth on some of these calls here. I’ve already booked a lot of profits on this thing. So I almost have a free trade working.
I suppose if we make a move up towards $24-25 that would probably be good. I think it’s got some potential to get up there.
So that’s American Superconductor.
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