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Tech Stocks At New Highs: Why Super Micro Computer Crossed A Buy Point

Among tech stocks hitting new highs this past week, Super Micro Computer (SMCI) may be worth a closer look. Parts capped off an impressive fifth week in a row with wins, including Friday’s all-time high of 60.31.


Meanwhile, LPL Holdings (LPLA) has emerged as a potential leader in the financial sector of the stock market. This investment advisory giant topped the list for the third week in a row. In doing so, the large cap cleared a 220.90 appropriate buy point in a 15-week consolidation pattern.

Tech Stocks At New Highs: Super Micro Up 54% In 5 Weeks

Super Micro did nothing on Friday. This is completely understandable, given the strong growth since a strong reversal on July 28 led to a 3.4% gain in that session alone.

Note, also, on a daily chart how the specialist in high-performance servers and computing systems defended a positive gap-up that occurred on July 21. Shares busted 13% higher in that session. after the company raised Q2 guidance. This action focuses on the expected upside from the customer’s design gains. Super Micro raised its earnings guidance to $2.30-$2.40 per share, or up 184%-196% compared to a year ago.

The company reported its second quarter numbers after the closing bell on Tuesday.

Buying ahead of earnings news often carries a higher risk than usual. However, SMCI stands in the 5% buy zone after clearing a 58.44 ideal entering a near 13-week amorphous base. Just remember that the 37% decline within the pattern is deeper than the 33% maximum decline you want to see.

Super Micro holds a winning 98 Composite Rating, a 96 EPS score, a 97 Relative Strength Rating and a “B+” Accumulation/Distribution grade. The relative strength line ran to new highs this past week, marking a strong outperformance against the S&P 500.

Outside of tech stocks, LPL has had good top-line growth over the past six quarters. The San Diego-based brokerage’s revenue increased 17%, 39%, 38%, 32%, 21% and 7% against year-ago levels through the second quarter of this year.

A tough comparison to Q2 2021, when LPL increased its sales by 39%, may have pushed growth to slow in Q2 2022.

At least four members of the IBD Mutual Fund Index hold shares of LPL, including Janus Henderson Enterprise (JANEX). To view the index’s performance, click the “View General Market Indicators chart page” link, found at the bottom of each day’s IBD Big Picture column.

Please follow Chung on Twitter: @saitochung and @IBD_DChung


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