This Stock Is a Screaming ‘Buy’ Now

As stocks have recovered from April lows, one of the sectors leading the charge higher has been the Technology sector. Specifically, one of the pockets in this sector with the most impressive strength are those companies whose businesses are closely connected to A.I. Once we got through Q1 earnings one message was received loud and clear. Corporate America’s Capex binge of A.I. spending is not over, in fact, it is still rapidly accelerating as the A.I. race is heating up further! This was a massive sign of support for this group of companies as some investors had worried that A.I. spending may have begun to wane.

Now that investors have gotten a ‘green light’ that A.I. demand is still high and growing, this has lit a fire under this basket of stocks as they are screaming higher. All the major A.I. names you know well have roared higher in the past few weeks. It is well established that A.I. requires high-powered GPU chips in order to work. However, without other supporting equipment, these high-powered GPUs are just a fancy $40K paper weight. Enter Amphenol Corp., symbol: (APH). APH is a company that perfectly fits this role as their networking products are absolutely necessary in order to build out A.I. datacenters. Check out the chart for this red-hot stock!

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This is a daily chart for APH and also included at the bottom is a lower study charting the OBV line for the stock. As I have illustrated on the chart, APH’s OBV line has been sloping up since early April, just about the same time the stock’s current rally began. This is important because it is confirming the price action that we are seeing in APH’s price chart. This confirmation gives me evidence that APH’s recent move higher does have staying power because there is significant buying pressure underwriting the stock. Seeing a chart like this come across my desk is exciting because I see MAJOR OPPORTUNITY for a trade here.

Once I spot a setup like this, I quickly pull up the option’s list for the stock as this is my preferred method of trading these ‘Buy’ signals. For a setup like this, generally, I start my search by looking for a call option to purchase. This way should APH’s powerful trend continue, my directional call would stand to produce a solid profit! There is a slightly in the money call that if entered at current prices has 123.2% profit potential if APH shares increased by 10.0%. By harnessing the leverage provided by the APH call options, this trade would be setup up to outperform the stock 12 to 1. This is exactly the type of trade setup my technical analysis strategies are designed to pinpoint.

Wishing You the Best in Investing Success,