Why Traders Are Watching Aehr Test Systems (AEHR)
Aehr Test Systems engages in the design, manufacture and marketing of test and burn-in products to the semiconductor manufacturing industry. Its products include wafer contact test systems, test during burn-in systems, test fixtures and die carriers.
Take a look at the 1-year chart of Aehr (AEHR) below with the added notations:
Chart of AEHR provided by TradingView
After hitting $13 as resistance back in July, AEHR eventually cleared that mark on route to its recent $19 high. A pullback brought the stock back to $13 again where it ended up finding support. AEHR has shown the $13 price to be an important level (yellow), one that could provide support once more on the current decline.
The Tale of the Tape: AEHR has a key level at $13. A trader could enter a long position on a pullback down to that level with a stop placed below it. However, if traders are bearish on the stock, a short trade could be made on a break back below $13 instead.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key…
Christian Tharp, CMT