Anatomy of a Great Trade: A Big, Crazy Win In The Most Unlikely Of Places – ESTA

by | Feb 23, 2024

There are two huge factors in catching a massive breakout winner.

The first is finding the stock.

That’s a big topic for another time.

But let’s assume that we’re tech-aware traders and that Super Micro Computer Inc. (SMCI) was on our radar.

At that point we need the second factor: a systematic way to trade.

Back in 2013, SMCI made a big move.

On a monthly chart, it closed above the 12-month simple moving average (SMA) twice in a row. That’s our entry.

Then it went from $13 to $28. We finally exited on a close below the SMA. See that here on the left side of the chart:

Remember, once a stock makes a 100% move, it’s likely to do it again.

Except SMCI didn’t do it again. Not for a long, long time.

From 2016-2021, it didn’t go anywhere.

But if we didn’t give up, there was yet another signal in January of 2021. It would’ve entered us at $31.80:

How did that trade turn out?

 

 

Holy moly.

SMCI is now at $894 and we hypothetically would still be in (because it never closed below the SMA).

The monster trades are out there.

As long as we don’t give up and trade them according to our system.

Happy trading,

— Scott Welsh

WRITTEN BY<br>Scott Welsh

WRITTEN BY
Scott Welsh

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