SNDK is breaking out clearly; added to active trading list ahead of Nov 5 earnings.

I want to talk about some memory and data storage stocks like SanDisk, Micron, and the like.

Regarding SanDisk , let me first show you the basic chart. Good. As you can see, we all know what has been going on here for a long time. Then this great decline occurred. I would say about 60%.

Yes, it's down by almost 60% , which is very painful , especially for that poor person who bought at the peak. And by the way, I was that person years ago. It's painful. I can tell you that.

It would be best if that person was here at the bottom. But we can see how this stock has been traded. Well, a good upward trend , and quite predictable along the 20-day moving average .

When this trend reversed, watch the 20-day moving average . That's the black line here. What was providing support, even here when trading was sideways, there was volatility, but the 20-day moving average was a good dividing line .

Once this line was broken with a higher- than-average trading volume here, it began to act as resistance. And this area is here, I will say it clearly. This point here tells you that this movement has ended.

Because the 20-day moving average was acting as support. The support level, once broken, becomes a resistance level. This is what is shown here. But it goes up here, then back down to this point .

We don't really know if that represents resistance. It may just be a short break to recover, then it will continue to climb to new record levels. But he didn't . Once it tried twice, it then dropped below the 50 level with a large trading volume.

That told us that this movement was over and you should move away. Okay, that's acceptable. You know, retrospective analysis always seems very sophisticated. But in the meantime, this stock has been trading in a series of higher lows and a flat top here.

So I'll show you , if you'll excuse me, what I'm looking at here. Just look at the green boxes. Good. This is a diagram about price clusters here. And you can see that it is at higher levels.

Such a box that contains all these price pools is here. Then we move here. Draw it from here down to there. This is the next box, higher bottom. Then next, a slightly higher peak and a higher trough as well.

So this is what the base looks like when you like to draw boxes like me. Therefore, he is just breaking this rule. We saw a lot of traffic here on Friday. And that was it; there were a lot of forced purchases at the end of the day.

I mentioned this to our members yesterday to prevent you from being drawn into it. This is what happens when a stock is added to the S&P 100 index. At the end of the day, some rebalancing takes place .

The funds that are required to buy the stock actually buy it. This is also why Nike's stock fell sharply at the same time. By the way, Nike is very bad. Just my personal opinion .

But I'm sure Dylan Mulvaney is still dancing to that tune . Anyway, let's get back on track. So, there was a lot of movement here. Very significant movement today for the moment.

Then he moved sideways. But on Monday , this was the sequel. This is an important concept in trading, guys. At the end of the day on Friday, you can look and see what caused that big movement, and you can see that quite easily.

Damn, it's just a rebalancing of the index. They had to buy the stock, and they had to buy it on Friday. So, this means that the purchasing process has ended. Therefore, the stock will definitely fall on Monday.

There is no reason for anyone to buy it. This was not a real step, there was no actual movement here. It wasn't like saying, "Look, they're actually buying the stock ." I must participate in this movement.

No, you reach this conclusion on Friday and say, "No, that's enough." This should be avoided . Well, that would be the wrong conclusion. It would be a simple conclusion, but that is why it is a false conclusion.

Because the market is bigger than just algorithms that rebalance indicators. It goes much further than that. So , even though this was a rebalancing and with a very large trading volume, a really large volume, and even though it was a rebalancing of the index, you know that you are going to get some kind of follow-on buying the next day.

This is how markets work because trading is ultimately controlled by humans. Even algorithms receive their instructions from someone. So, you will see a rise the next day. The real question is: Will this rise continue?

And so, boom. This is what we saw on Monday. An upward movement. I don't think I remember exactly what it was. impossible. Um, I don't think this was a big deal. Yes, it wasn't even a 2% increase.

But almost immediately afterward , it took some time, but this thing quickly dropped below the volume- weighted average price . My instructions to our traders were: "Once the stock opens, stay away from it ."

It is something you would only consider buying if the stock stayed above the volume-weighted average price and if it stayed above the opening gap , the opening price which was 18.25.

Well, he didn't do that. This was very clear, no, it's not my deal. Then you sit here and wait for the next day, and that will be today. But the question remains . Will the stock rise above this level again?

Because if it does not rise above this opening price, then by definition it is still mired in a state of oversupply. So, today it remained above this level. It rose even further with the increase in trading volume.

That's why I put this stock on the active trading list. I think SanDisk is achieving a very clear breakthrough. They announce their earnings on November 5th,