Navigating High-Flying Momentum Stocks: Insights from SMCI

Navigating the intricacies of high-flying momentum stocks can be challenging, especially when they move at an exponential pace. Take SMCI for instance, a prime example of such stocks. Upon examining its chart, I noticed a rising wedge within an uptrend. Typically, these patterns tend to resolve to the downside.
However, it's crucial to acknowledge that sometimes these wedges experience an overshoot breakout. In such cases, patience becomes paramount as you await the stock's return within the wedge to initiate a short position, targeting a decline towards the bottom of the wedge formation.
Upon closer inspection, an intriguing RSI divergence emerges. While the price continues to make new highs, the RSI heads in the opposite direction, failing to confirm the upward movement. This discrepancy warrants attention as it often signifies a potential reversal in the making.
Understanding these technical indicators can provide valuable insights for navigating volatile market conditions and making informed trading decisions. Keep a keen eye on SMCI and similar stocks for potential trading opportunities based on these observations.