Aehr Systems (NASDAQ: AEHR) has launched right up to resistance between $18 and $18.50. The 15 strike calls that expire this week (10/21) are trading around $3.40. From yesterday morning’s entry at $1, that’s a 240% gain. Take it.
Now, let’s look ahead a little because we are not done with this stock…
Given the strength of Aehr’s earnings beat from a couple of weeks ago, the stock is being revalued. Interestingly, analysts have not come out with their revised earnings estimates for the remainder of 2022 or 2023. Business is booming for Aehr Systems.
(For more detail on the business opportunity, check out the investment report I wrote about it here).
But you should be aware that the growth estimates I cited for the silicon carbide semiconductor market just three weeks ago have already been revised higher.
It’s not often you find an entire sector that’s growing so fast that the analysts can’t keep up. But that’s what’s happening here, and I expect forward earnings revisions for Aehr Systems to be significant.
Shares could very easily challenge year-ago levels above $20, which I’ve circled in yellow on this chart:
So, our next move is to look for the first dip to grab November expiration calls. We will likely get a dip down to $16.40-$16.80, which I’ve marked with that big sloppy purple line. This move should come soon, like in the next couple of days. And I would also expect it to be a fast move, probably an intra-day drop to that support zone that recovers quickly.
There is no doubt that investors want to own this stock. And they will jump on any weakness. I’m hopeful we could get the Aehr $17.50 strike call option that expires on November 18 around $1. That would be ideal.
As for the StoneCo (NASDAQ: STNE) and Jumia (NASDAQ: JMIA) calls, we’ll leave them as is for the time being. I’m a little disappointed that Jumia hasn’t extended yesterday’s move, but we can be patient for another couple of days.
Same thing for StoneCo, really. It tried to push past that $11.30 resistance point this morning but failed. I’d expect it to regroup for another stab at a breakout.
That’s it for now, take care, and I’ll talk to you soon.
Until next time,
Brit Ryle
The Profit Sector
