Aehr Test Systems Stock Shows Large Players Quietly Accumulating

Aehr Test Systems stock has formed a positive divergence between large players volume and the price chart. Large players are accumulating the stock as it has pulled back over the last few days. Before we get to the chart, let’s look at what Aehr does and why this stock could have explosive growth going forward.

Aehr Test Systems Company Profile

Aehr Test was incorporated in the state of California on May 25, 1977 and completed its initial public offering on June 11, 1997. The Company’s common stock trades on the NASDAQ Capital Market under the symbol AEHR.

Aehr Test is a global semiconductor manufacturer. The Company has sales and service operations in the United States, Japan, Germany and Taiwan, and has established a network of distributors and sales representatives in certain key parts of the world. Its corporate headquarters are located in Fremont, California.

Aehr Test Systems is a worldwide supplier of systems for burning-in and testing memory and logic integrated circuits and has an installed base of more than 2,500 systems worldwide. Aehr Test has developed and introduced several innovative products, including the ABTS, FOXTM and MAX systems and the DiePak® carrier. The ABTS system is Aehr Test’s newest system for packaged part test during burn-in for both low-power and high-power logic as well as all common types of memory devices. The FOX system is a full wafer contact test and burn-in system. The MAX system can effectively burn-in and functionally test complex devices, such as digital signal processors, microprocessors, microcontrollers and systems-on-a-chip. The DiePak carrier is a reusable, temporary package that enables IC manufacturers to perform cost-effective final test and burn-in of bare die.

Aehr Test Systems News

On July 12, 2017, Aehr Test Systems announced that it received a follow-on order exceeding $3.8 million for multiple ABTS test and burn-in systems from a leading multi-national manufacturer of advanced logic integrated circuits (ICs) for automotive, embedded processing, digital signal processing and analog applications. The order also includes down payments to lock in delivery dates. The ABTS systems are planned to ship by the end of calendar year 2017.

Mark Allison, Vice President of Sales, said, “We are pleased to receive another follow-on order from this customer, who continues to run at full capacity in their burn-in and test areas. Our ABTS Systems, with their individual temperature control capability for high-power devices, are a key part of this customer’s quality and reliability program for their expanding line of automotive products, and are helping companies that supply devices into the automotive sensor, mobile communications, IC, and Internet of Things markets meet the higher quality and reliability needs of these markets. The ABTS system capabilities, along with our superior customer support, have more than met the expectations of this customer. This has led to a mutually beneficial business relationship resulting in our largest installed base of ABTS systems.”

Aehr appears to be benefiting from the rapid growth in automotive sensor technologies. This includes Advanced Driver Assistance Systems (ADAS) such as collision avoidance systems using LIDAR (Light Detection and Ranging), RADAR or other sensing technologies. Autonomous vehicles use collision avoidance systems to detect obstacles and to navigate safely through dangerous environments. Reliability of the devices in these systems is especially critical for autonomous driving applications so that means manufacturers of ICs in the automotive industry really need the testing services of companies like Aehr Test Systems. This means Aehr Test Systems stock could soar on explosive demand growth for its critical systems testing hardware and software.

Aehr Test Systems Stock

Aehr Test Systems stock looks like a good setup on a Symmetrical Triangle pattern. The Effective Volume study shows large players volume is rapidly rising. The Twiggs Money Flow confirms the stock is under accumulation. We also had a bullish Pocket Pivot signal on Friday, July 28, 2017.

Prices have been consolidating lately and there is a resistance zone just above the current price starting at 4.06. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 4.04, a stop order could be placed below this zone.

Aehr Test Systems stock was found using my GST Positive Divergence screener as talked about here.

What is 5G Rollout Schedule With Major Carriers

Cradlepoint published an awesome research report about what is 5G implementation schedules for the major carriers and what technology they will be using.

I will try to summarize the important parts of Cradlepoint’s research report and link to the full report in PDF format below.

What is 5G In 2017?

5G is not like 4G yet and won’t be for a few years.

The 5G trials being touted by network operators are for fixed wireless access only. Thus, 5G initially is only useful for point-to-point, line-of-sight transmission as it can not penetrate buildings and walls yet.

Verizon stopped digging trenches 10 years ago for its Verizon FiOS (Fiber Optic Service), and last year Google discontinued its Google Fiber program. Digging trenches and maintaining wired lines has become cost-prohibitive.

The first use of 5G will be for fixed wireless access. Providers will use millimeter wave, the portion of 5G that works well to pass large amounts of data from one fixed point to another. They also will use 5G as an alternative to fiber connectivity to homes and businesses.

What is 5G Technology?

In order to achieve amazing 5G speeds in the future, the industry will get a lot more complex and use different telecommunications technologies from the past.

5G will encompass many wireless technologies, including 5G New Radio, Gigabit LTE for super-fast speeds; LTE IoT for low power, long battery life, and long-range coverage; Digital TV, C-V2X, or vehicle to anything; and ultra-low latency.

5G will build on the architecture of voice (2G); voice, video, and data (3G); and massive mobile data (4G)—and add massive bandwidth and density, as well as ultra-low latency. 5G also will integrate aspects of WiFi and long-range/low-power networks.

What is 5G Fixed Wireless Access?

The first form of 5G will be implemented with fixed wireless access. Fixed wireless access is having an antenna on the street or nearby building and then beaming the 5G transmission to a nearby antenna on a business or home.

In other words, the first deployments of 5G are meant to replace fiber, cable, and DSL for last-mile connectivity into homes and businesses.

What is 5G Rollout Schedule?

True wireless 5G is still years away but the initial deployments of 5G will arrive within the next year.

The rollout schedule of 5G. Source: Cradlepoint

By 2019 millimeter wave will be combined with sub-6 GHz spectrum—including all current LTE and WiFi for failover/failback with ubiquitous coverage indoors and out. New sub-6 GHz spectrum will be available as well, including unlicensed 3.5 GHz CBRS and 5 GHz LAA, allowing for increased bandwidth on free spectrum. This important building block will enable network operators to make “true” 5G available.

Here is Cradlepoint’s full research report on 5G: View the Cradlepoint5Greport PDF

Tech Stocks To Buy, So Juicy After Recent Pullback

What are the best tech stocks to buy right now? I can’t find a technology stock that doesn’t look like a good buy right now. Technology stocks are reverting to the mean because they got a little too hot last month.

Tech Stocks To Buy

Large players are not stepping in yet and the Twiggs Money Flow is still falling; however, I think STM shows a decent setup pattern especially when you consider that institutional investors have increased their long positions by a whopping 71% over the last 3 months. Prices have been consolidating lately and the volatility has been reduced. There is a very little resistance above the current price. There is a support zone below the current price at 14.3, a stop order could be placed below this zone.

FB presents a decent setup pattern. Prices have been consolidating lately. There is a support zone below the current price at 148.42, a stop order could be placed below this zone.

MSFT does present a decent setup opportunity and is one of the better tech stocks to buy. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 68.64. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 68.16, a stop order could be placed below this zone.

AMZN does present a decent setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 985.85. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 953.65, a stop order could be placed below this zone.

GOOG looks a little too much like a falling knife right and so I’m not seeing a good setup at the moment but love the pullback. Price movement has been a little bit too volatile to find a nice entry and exit point. It is better to wait for a consolidation first before taking an entry.

NFLX looks like a falling knife so I don’t see a good entry right now. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

When you are looking at which tech stocks to buy one thing is clear, the latest pullback has presented some juicy opportunities.

More Evidence Tech Pullback Is Just Reversion To Mean

The sell-off in technology is more about market reversion to the mean than it is indicative of some gloom and doom scenario where technology stocks lead the rest of the market lower.

Credit Suisse just released a report to clients where they are neutral to slightly cautious on technology stocks for the next 3 months, but remain positive longer out.

There are many bottoms-up drivers in the technology sector right now including the new iPhone, continued increase in cloud usage, greater adoption of artificial intelligence across various sectors, and autonomous driving. Technology adoption and market penetration are likely to increase over the next couple of years.

The S&P 500 is dominated by a few big tech companies. Innovations such as more automation in the grocery industry from Amazon, the iPhone 8, and Tesla’s Model 3 are catalysts for the S&P 500 to move even higher.

Reversion To The Mean

The green line is what I would calculate the mean to be at. As you can see, QQQ has overshot the mean over the last few months and so a move back towards the 10 year mean line is normal.

Fiscal policy will also be a catalyst for continued growth such as tax reform. The medical device tax, investment tax, tanning tax, Medicare Hospital Insurance surtax, the health insurance fee and tax on brand pharmaceutical manufacturers, all will likely be repealed at some point in the future.

Credit Suisse set negative expectations for consumer goods. Stocks that trade in the consumer goods sector are likely going to be stocks we should avoid. Fundamentals and valuation are likely to continue to deteriorate in clothing, department stores, grocery, and packaged food.

Analog Devices Stock Shows Large Players Accumulating

The Analog Devices stock chart shows that large players are accumulating shares as the price consolidates. Institutional ownership has increased by 13.64% over the last 3 months.

Back on June 19, 2017, Raymond James re-initiated coverage of Analog Devices with a “market perform” rating, citing some complications related to its March merger with Linear Technologies. Raymond James thinks the combination of Analog Devices with Linear Tech will result in an analog chip “powerhouse” down the road, but upcoming headwinds related to the company’s recent loss of Apple Inc. business poses a problem managing upward estimate revisions.

Analog Devices Stock

A bullish Pocket Pivot signal occurred on Friday, June 23, 2017 (blue dot on chart above). There is a huge positive divergence between the price and the Effective Volume which shows large players accumulating the stock. Do large players know something we don’t? The Twiggs Money Flow is still negative for Analog Devices stock and so you need to be cautions about taking an entry. There is a resistance zone just above the current price starting at 82.63. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 81.07, a stop order could be placed below this zone.

GO HERE TO CHART LARGE PLAYERS AND THE TWIGGS MONEY FLOW LIKE THE CHART ABOVE… AWESOME TOOL

Micron Technology Bullish Call Spread Ahead of Earnings

Hearing that MKM Partners suggested that Micron Technology investors enter a bullish call spread of the October $33 and $38 calls ahead of earnings in two weeks.

Micron Technology Call Spread

That reason that MKM Partners is recommending this strategy is that they believe Micron’s stock price will rise ahead of the company’s earnings report in two weeks.

Specifically, MKM Partners is recommending buying October $33 calls, while selling October $38 calls.

Micron shows a strong growth in Earnings Per Share. EPS is up 923% quarter-over-quarter which is awesome. Revenue has been growing by about 8.2% on average over the past 5 years.

Micron is a global leader in the semiconductor industry. For more than 35 years, the company has
dedicated itself to collaborating with engineers to drive innovation and transform what’s possible. Micron has 26,000 patents and 30,000 employees in 18 countries.

7 Minutes of Horror From Friday’s Flash Crash In Technology

On Friday, June 9, 2017, the technology sector did what can only be described as a flash crash. I have captured the real-time event in under 7 minutes on a sped up 10 minute chart.

Anatomy of a Flash Crash

Notice the algos manufacturing a sell the breakout move. Opps, no humans left and all the quants doing the same thing, selling the breakout. The machines are not smart, their machines. It’s ARTIFICIAL intelligence, meaning fake intelligence. Programming sub-routines start all running sell code as stop loss levels are hit. It’s an AI manufactured flash crash that destroys everything in its path. It’s machines run amok.

There’s some irony that this happened in the technology sector, the very home of AI.

Elon Musk Falling Out of Love With Tesla, Bashes Stocks Current Valuation

May 18, 2017: The CEO of Tesla Elon Musk said in a Guardian interview, “I do believe Tesla’s market cap is higher than we have any right to deserve; we currently produce just 1% of GM’s output. Being a car manufacturer is the worst way to earn money, honestly…On a risk adjusted return basis, an auto company has to be the dumbest thing you could possibly start. We’re a money losing company. This is not some situation where, for example, we are just greedy capitalists who decided to skimp on safety in order to have more profits and dividends and that kind of thing. It’s just a question of how much money we lose.”

February 15, 2017: Elon Musk appears to be part of Democrat attempts to discredit and destroy President Trump’s Administration. Musk tweets, “The Muslim immigration ban is not right… Regarding govt policy, there are often things that happen that many people don’t agree with. This is normal for a functioning democracy. They rarely warrant a public statement. However, the ban on Muslim immigrants from certain countries rises to this level. It is not right.”

Elon Musk posted and then later deleted these Twitter comments.

In 2016 Tesla gave Democrats $60,410 dollars and Republicans only $3,820. To get Democrat congressional candidates elected, Tesla gave $24,227. For Republican candidates, Tesla gave $0. Tesla gave the Hillary Clinton campaign for President $24,558. Tesla gave the Donald Trump campaign for President $290.

February 6, 2017: Elon Musk signed Tesla and SpaceX to the legal brief filed by businesses opposed to President Trump’s executive order on immigration. Folks, that’s such a stupid move by Elon Musk that now I’m questioning how effective he is at making good decisions and running profitable businesses. You know that the Trump Administration is now going to have the EPA do away with a lot of the clean air and electric car mandates pushed by the EPA that Tesla has benefited from. Second, any business that signs this legal brief is putting other interests above protecting US citizens. As a business person, that’s suicide to put your name to a list that half of the country will find offensive and not buy your products. Again, STUPID move by Elon Musk.

January 17, 2017: According to reports in the mainstream press, Tesla is expanding investment in the Nevada gigafactory by $350 million, adding 550 new jobs, to make the Model 3 automobile.

January 3, 2017: Tesla reports Q4 net orders for Model S, Model X were up +52% year-over-year. For FY16, Tesla produced 83.9K vehicles which is up +64% year-over-year. Delays in production resulted in challenges impacting Q4 deliveries, including cars missing shipping cutoffs for Europe and Asia.

December 27, 2016: This is incredible. There isn’t a driver on the road anywhere in the world that doesn’t want this Tesla technology in their car. Tesla’s Autopilot radar technology reportedly shown providing a driver alert seconds before an accident occurred ahead of the car. The autopilot reportedly also started braking before the driver could react to apply the brakes.

Check out this incredible video. You won’t believe your eyes:

What is crazy is that if you watch this several times, you can clearly hear the Forward Collision Warning alert before the lead vehicle even applied the brake, which shows that the Autopilot wasn’t only using the lead vehicle to plan the path, but also the vehicle in front of it – the black SUV. How could this be possible?

Tesla’s version 8.0 software update in September pushed out to Tesla owners a new radar processing technology that can see ahead of the car in front of you and track two cars ahead on the road. The radar can bounce underneath or around the vehicle in front of the Tesla Model S or X and see where the driver potentially can not because the leading vehicle is obstructing the view.

Tesla Motors, Inc. designs, develops, manufactures, and sells electric vehicles and stationary energy storage products in the United States, China, Norway, and internationally.

Alarm.com Beats on Earnings and Revenue

May 09, 2017: Alarm.com reports Q1 EPS of $0.23 versus the $0.15 estimate. Revenue also beat coming in at $74.2 million versus the $69.4 million estimate.

– Adj EBITDA $14.1M, +30% y/y
– SaaS and license revenue $50.2M, +26% y/y

December 12, 2016: Seeing heavy call activity 2400 Mar 35 calls traded at $0.70.

November 30, 2016: Maxim initiates coverage of Alarm.Com Holdings with a Buy rating, and a price target of $37.

November 14, 2016: Alarm.Com Holdings reports Q3 EPS of $0.19 versus the $0.11 estimate. Revenue also beat coming in at $67.8 million versus the $59.8 million estimate. The company names Steve Valenzuela the new CFO, effective November 15, 2016.

The CEO said, “Along with our service providers, we remain well positioned to capture growing momentum in the market for connected home and business solutions. At the same time, we continued to invest in our platform to open new market opportunities for Alarm.com and our partners. Valenzuela joins Alarm.com from SugarCRM, where he served as CFO since January of 2015.”

Alarm.com is the leading platform solution for the connected home. Alarm.com makes connected home technology broadly accessible to millions of home and business owners. Our cloud-based services enable home and business owners to intelligently secure their properties and automate and control a broad array of connected devices through a single, intuitive user interface.