This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in a spreadsheet. These are the trades I exited this week.

Stocks or Exchange Traded Products

None.

Options

1. Put spread on Lightwave Logic (). Entered at a net credit of $1.60 as part of a 3-leg combo on 5/13/2026; exercised and assigned on 7/30/2026. Loss: 100% of max risk (88% on premium collected). Signal: Market Watchers.

2. Put diagonal on SiteOne Landscape Supply (). Entered the August 21st/September 18th, 2026 $95/$100 put diagonal for a $3.83 net debit as part of a 4-leg inverted hybrid combo on 7/28/2026; exited the diagonal for a $5.00 net credit on 7/29/2026. Profit: 31%. Signal: Bearish Rally Failure.

3. Short calls on Knowles (). Sold-to-open the September 18th, 2026 $50 call for $1.46 as part of a 4-leg hybrid combo on 6/26/2026; bought-to-close for $0.20 on 7/28/2026. Profit: 86% on premium collected. Signal: Market Watchers.

4. Short calls on United Microelectronics (). Sold-to-open the October 16th, 2026 $37 call for $1.55 as part of a 4-leg hybrid combo on 7/10/2026; bought-to-close for $0.20 on 7/28/2026. Profit: 87% on premium collected. Signal: Market Watchers.

5. Short calls on CPS Technologies (). Sold-to-open three October 16th, 2026 $15 calls for $1.72 as part of a 4-leg hybrid combo on 6/11/2026; bought-to-close for $0.20 on 7/27/2026. Profit: 88% on premium collected. Signal: Multibaggers.

6. Put spread on Cogent Biosciences (). Entered at a net credit of $1.91 as part of a 4-leg hybrid combo on 4/27/2026; exited at a $0.20 net debit on 7/31/2026. Profit: 90% on premium collected. Signal: Market Watchers.

7. Short calls on Spire Global ( ). Sold-to-open the October 16th, 2026 $28 call for $2.51 as part of a 4-le hybrid combo on 5/19/2026; bought-to-close that call for $0.20 on 7/28/2026. Profit: 92% on premium collected. Signal: Market Watchers.

8. Short calls on Bitdeer Technologies (). Sold-to-open two September 18th, 2026 $25 calls for $2.55 as part of a 4-leg hybrid combo on 6/18/2026; bought-to-close those calls for $0.20 on 7/27/2026. Profit: 92% on premium collected. Signal: Market Watchers.

9. Short calls on Viavi Solutions (). Sold-to-open the September 18th, 2026 $70 call for $4.34 as part of a 4-leg hybrid combo on 5/19/2026; bought-to-close that call for $0.20 on 7/29/2026. Profit: 95% on premium collected. Signal: Market Watchers.

10. Short calls on Applied Digital (). Sold-to-open the October 16th, 2026 $65 call for $5.10 as part of a 4-leg hybrid combo on 6/4/2026; bought-to-close that call for $0.20 on 7/29/2026. Profit: 96% on premium collected. Signal: Market Watchers.

Comments

Stocks or Exchange Traded Products

No exits this week. I’ve focused on options instead of our basic strategy, which involves buying stocks and ETFs. You can find the performance of our top names since I launched this Substack here.

Options

Ten Exits, One Defined Loss

We had ten partial options exits this week. Nine were profitable, ranging from 31% on premium outlay to 96% on premium collected. The Lightwave Logic put spread reached its full defined loss. All ten were partial exits from larger structures, so none closed an entire position.

The LWLG Loss

Lightwave Logic’s $15/$12 put spread reached its maximum loss after the short put was assigned and the long put was exercised. We lost 100% of max risk on that spread. The long call from the original 3-leg combo remains open.

Seven Upside Caps Remove

Seven of the winners came from buying back short calls for $0.20 after selling them for between $1.46 and $5.10. Those exits returned 86% to 96% on premium collected and removed the upside caps from the corresponding long calls.

The short calls had already done their financing job. Buying them back near their floor left more room for the remaining bullish legs to benefit from a rebound.

A Bearish Payoff And A Bullish Reset

The SiteOne bearish put diagonal returned 31% after the company missed earnings and the shares fell sharply; its short call spread remains open. On the bullish side, we paid $0.20 to close Cogent Biosciences’ $1.91-credit put spread, keeping 90% of the premium while leaving its call calendar open.

The week’s exits show why we manage multi-leg trades one piece at a time. We harvested financing legs near their floor, monetized a fast directional move, and preserved the remaining optionality where the thesis still had room to play out.

Paying More For Stronger Evidence

Yesterday, we tried to enter a short-dated earnings trade on one of the original AI bottleneck stocks. Our order didn’t fill. Then the company’s earnings beat expectations, strengthened the bottleneck thesis, and the stock traded more than 20% higher overnight.

The shares cost more today. The company is worth more, too. The earnings uncertainty has passed, and a newly announced long-term supply agreement adds commercial weight to a story that had already produced two winning trades for us.

The technical picture has changed as well. Before the report, ChartMill gave the stock a Technical Rating of 4, a Setup Rating of 3, and an RSI of about 42. Those readings captured the selloff before the gap. Fidelity’s live data after the report put its RSI near 52, with the shares above their 50-day exponential moving average.

Today’s structure reflects that stronger evidence. Instead of another short-dated binary, we’re using a defined-risk trade that reaches into early 2027 and spans two more earnings cycles.

A Second Bottleneck Reentry

Our second trade brings us back to a former winner in the silicon-photonics stack. Its Swedish shares have started rebounding, but the OTC limit price in the trade below is still more than 10% under the lowest price at which we exited our previous position. The stock remains below its 50-day EMA, so this is a deliberate exception to our usual screen discipline.

The U.S. government’s investment in GlobalFoundries () adds useful context. Washington has committed about $1.5 billion in CHIPS funding to expand its domestic capacity, and GlobalFoundries has selected the supplier behind today’s second trade for its silicon-photonics platform. That ties the idea directly to a funded manufacturing ecosystem.

Both ideas came from our Multibaggers list. As regular readers know, that’s a subset of our Market Watchers X list populated by accounts with recent, 100%+ winners.

Full details below.

Today’s First Multibaggers Trade

AI optical-interconnect / indium-phosphide bottleneck theme

RSI: 42; Chartmill Technical Rating: 4; Setup Rating: 3; Fundamental Rating: 2.

Note: This Chartmill data doesn’t incorporate Thursday’s blowout earnings report or the stock’s post-earnings move.

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A Violent Rebound

Thursday’s 2.8% Nasdaq rally interrupted the worst stretch of the current momentum unwind. Microsoft had its best session since 2008 after its results showed that AI spending was translating into cloud growth and operating profit; semiconductors and other AI-stack names recovered part of Wednesday’s losses.

The rally came despite renewed U.S.–Iran missile exchanges and worsening shipping disruptions around both the Strait of Hormuz and Bab el-Mandeb, reminders that geopolitical and energy risks remain active.

Amazon added another confirmation after the close. AWS revenue rose 37% year over year—its fastest growth in 18 quarters—and both its AI and chips businesses passed $25 billion annual revenue run rates. The AI buildout remains on track, and its largest customers are still spending to expand it.

A Sound Thesis, Fragile Financing

The same week also showed how leverage and liquidity can overwhelm a sound long-term thesis. Situational Awareness, the roughly $20 billion AI-focused hedge fund, sold its public-equity portfolio to Citadel after heavy losses and a reported effort to raise fresh capital.

We compared its path with a Portfolio Armor portfolio created on June 5th that held some of the same AI-stack names, but hedged every position against a decline greater than the investor’s 20% threshold. At Wednesday’s low, those securities were down 24.3% as an unhedged basket; the hedged portfolio was down 9.38%. The lesson is to keep exposure to powerful themes while defining the downside in advance.

We examine that comparison in more detail in here:

What Our Rankings Are Saying

Nine of this week’s top ten names have direct exposure to semiconductors, memory, chip testing, optical networking, AI compute, or robotics. Even after the massacre, our system’s highest estimated six-month returns remain concentrated in the physical AI buildout and adjacent automation.

That concentration can produce outsized gains when the theme leads and sharp drawdowns when it unwinds. The basic strategy below manages that risk with equal position sizing and trailing stops. Investors who want each position hedged against a decline greater than their chosen six-month threshold can use the Hedged Portfolio Method. The rankings highlight what to own; position sizing, stops, or options hedges can limit your risk.

Our Basic Strategy

Our basic strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of ~20% or more on them, and replace them with names from the current week’s top ten when we get stopped out of a position—there are no options involved in this strategy.

Another Use For Our Top Names

We also use our top names in options trades, such as this one we exited earlier this month:

• 4-leg hybrid combo on Targa Resources (TRGP -0.22%↓). Entered at a net debit of $2.45 on 4/20/2026; exited the July 17, 2026 $210/$200 put spread at a net debit of $0.20 on 5/14/2026; then sold the September $270 / July $280 call calendar for a net credit of $18.25 on 7/15/2026. Profit: 637% on net debit (125% on max risk). Signal: PA Top Names.

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from January 29th.

Over the next 6 months, our top ten names from January 29th, 2026 returned -18.18%, versus +5.1% for the SPDR S&P 500 Trust ETF (SPY 0.23%↑).

So far, we have 6-month returns for 162 weekly top names cohorts since we started this Substack at the end of December, 2022.

[Skipping ahead so this post doesn’t exceed email length—you can see the top names returns for every week here]

And as you can see above, our top names have averaged returns of 17.94% over the next six months, versus SPY’s average of 9.64%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

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A Lack Of Situational Awareness

On Thursday, Axios reported that Situational Awareness had sold its entire public-equity portfolio to Citadel. The news came one day after the Financial Times reported that the fund had sought fresh capital following heavy losses in the rout in AI stocks.

Former OpenAI researcher Leopold Aschenbrenner founded Situational Awareness after publishing his influential 2024 essay series of the same name, which argued that rapid AI advances could produce artificial general intelligence before the decade’s end. Backed by Stripe’s Collison brothers and AI investors Nat Friedman and Daniel Gross, the fund reportedly grew to about $20 billion.

The irony in the name wasn’t lost on observers: a fund called Situational Awareness appears to have had a blind spot about its own leverage, liquidity, and crowded positioning. Aschenbrenner may still be right about AI’s trajectory, but a sound long-term thesis couldn’t prevent short-term financing pressure from dictating the exit.

Its latest public filing offers a snapshot. As of March 31st, its two largest disclosed common-stock positions were Bloom Energy, worth $878.7 million, and SanDisk, worth $724.4 million; it also disclosed call positions in both. A quarterly SEC filing can’t tell us what the fund still owned when it sold its equity book.

Both companies appeared in our June 5th hedged portfolios, making the difference in risk architecture especially instructive.

The Same Stocks, Hedged

The Hedged Portfolio Method is, to oversimplify, a hedged momentum strategy. Portfolio Armor starts with its current top names—the securities it estimates will generate the highest returns over the next six months, net of hedging cost. The investor chooses a “threshold,” the largest decline he’s willing to risk over that period, and our system builds the portfolio.

Because every security is hedged, the portfolio can concentrate in the names with the highest expected returns instead of diluting them through broad diversification. When one sector dominates the rankings, that lets us participate in more of its upside while strictly limiting the downside. On June 5th, at the start of the recent momentum massacre, our system created such a portfolio for an investor with $3 million who was unwilling to risk a drawdown of more than 20% over the next six months.

SanDisk () was one of the leading memory and storage names in the AI stack. It had been the Russell 1000’s strongest stock during the first half of 2026, rising as much as 858%, before leading the retreat among the index’s 25 biggest first-half winners.

Bloom Energy () was another marquee name among investors betting on the AI buildout, because data centers need enormous quantities of reliable power. Together, Bloom and SanDisk represented nearly $1 million of the portfolio’s $3 million starting value.

By late July, calling the reversal a “correction” almost seemed inadequate. Goldman Sachs’s High-Beta Momentum basket was on pace for its worst month on record. In individual AI-stack names, it looked more like a momentum massacre.

Putting The Hedge To The Test

Could investors have owned a group of momentum stocks caught in this historic unwind without getting blown up?

The June 5th portfolio gives us a real-time answer.

As of Wednesday’s close, the portfolio’s securities would have been down 24.3% as an unhedged basket.

The hedged portfolio was down 9.38%.

SPY was down 3.65%.

After Thursday’s rebound, the unhedged basket remained down 13.1%. The hedged portfolio was down 6.04%, while SPY was down 2.03%.

At Wednesday’s close, the hedges reduced the loss by approximately 14.9 percentage points relative to owning the same securities unhedged.

SPY performed better during this period, as we’d expect from a broad-market index. The hedged portfolio participated in the momentum selloff because it contained several of the stocks at its center, but it turned a potentially devastating drawdown into a survivable one.

Leverage likely magnified the massacre. Concentrated funds such as Situational Awareness, leveraged investors in Korea, and single-stock leveraged ETFs can all become forced or mechanical sellers as prices fall, turning an initial decline into a reflexive one. The precise exposures often become visible only after the unwind is underway.

The Hedged Portfolio Method sidesteps that opacity by defining each position’s risk in advance. We’ve explained the method in “Rough Seas, Smooth Ride” and “The Death Of Index Investing.”

The Longer Record

The June 5th snapshot shows the downside protection. The completed record shows that strictly limiting risk hasn’t required giving up the upside.

In June 2022, we updated the process we use to select securities. Since then, completed portfolios with higher risk tolerances have beaten SPY on average over their six-month lifespans:

• Portfolios hedged against declines greater than 20%: 9.24%, versus 8.72% for SPY.

• Portfolios hedged against declines greater than 25%: 10.81%, versus 8.82% for SPY.

• Portfolios hedged against declines greater than 30%: 10.76%, versus 8.80% for SPY.

• Portfolios hedged against declines greater than 40%: 11.48%, versus 8.76% for SPY.

The full record is available on our performance-tracking page.

An Intentionally Harsh Snapshot

We’re examining the June 5th portfolio before its six-month run is complete and stopping the clock during a historic momentum unwind—the harshest reasonable test of how the hedges behave when investors need them most.

The most recent portfolio hedged against a greater-than-20% decline to complete its full six-month run offers a useful perspective. It began on January 25th and finished on July 24th, near the nadir of the momentum massacre. The portfolio gained 13.46%, versus 7.23% for SPY—nearly twice the market’s return.

Situational Awareness will likely ultimately be right about the AI buildout. We remain bullish on it too. The lesson of the massacre is to pair exposure to AI and momentum stocks with strict risk limits.

The Hedged Portfolio Method lets investors capture more of the upside when one sector dominates while strictly limiting the downside risk of each position to their chosen threshold. That keeps us in the game for the gains that follow.

I’m replacing the trade from this alert earlier today,

With this:

The Longer-Dated AXTI Trade

AXT () is now trading around $44.52, up about 20% today. Rather than chase the repriced weekly earnings structure, I’m replacing it with a longer-dated position that gives the bottleneck thesis more time and is designed to span the company’s likely autumn and wi…

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A Bottleneck Before The Signal

We’re keeping Thursday’s alert to one trade. We examined another bullish candidate, but its options didn’t offer enough asymmetry and the stock didn’t look urgent. In this tape, keeping some dry powder for the next recovery signal is more attractive than forcing a second trade.

That opportunity may arrive soon. Several stocks we’ve traded successfully remain central to the AI buildout, and our AI Recovery screens are designed to alert us when their technical and fundamental conditions line up again. When one does, we want enough capital and risk budget available to act.

Today’s trade is a calculated exception. The underlying stock has already been a full-exit winner for us twice, and it was one of the original AI bottleneck stocks: it supplies a specialized material used in high-speed optical communications and data-center connectivity. Its shares have fallen about three-quarters from their recent high, but its bottleneck role hasn’t disappeared.

The Catalyst Arrives Before Confirmation

The stock doesn’t currently pass either of our AI Recovery screens, the Trend & Consolidation Screen, or our other bullish technical screens. It’s still below its 50-day exponential moving average, and its RSI (Relative Strength Index) is only 33. Ordinarily, that would be enough reason to wait.

There are two reasons we’re making an exception. First, the RSI has begun rising from oversold readings while another short-term oscillator remains oversold. Second, the company reports earnings after Thursday’s close, and it just announced a multiyear supply agreement backed by a substantial customer deposit. Those company-specific catalysts give the stock a chance to move before our slower technical confirmation arrives.

We’re treating this accordingly: as a short-dated, defined-risk binary earnings trade, not as our longer-term recovery entry. A weak report or guidance could overwhelm the contract news and send the shares lower again.

If the earnings trade works, we may be able to redeploy some of the gains into a longer-dated position after the stock clears our screens. If it doesn’t, we’ll have limited the damage to one defined-risk attempt and preserved the rest of our dry powder. Paid subscribers will find the exact structure, maximum entry price and exit orders below.

Today’s Earnings Trade

AI infrastructure / optical-substrate bottleneck

RSI: 33; Chartmill Technical Rating: 4; Setup Rating: 3; Fundamental Rating: 2.

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A Chinese Debut Deepens Korea’s Rout

On Monday, Chinese memory maker CXMT made a strong stock-market debut. On Tuesday, Samsung Electronics fell 13.4%, SK Hynix fell 14.7%, and South Korea’s benchmark KOSPI fell 10.8%.

Those moves reflected real concerns. Investors are worried about Chinese competition, domestic deep ultraviolet lithography equipment, less compute-intensive Chinese AI models, and increasingly circular financing within the American AI ecosystem. CXMT’s debut showed that China can still mobilize enormous amounts of capital behind a strategic industry.

Leverage accelerated the decline. South Korean regulators had already moved to tighten single-stock leverage rules, including tripling the minimum cash deposit for investors trading leveraged single-stock products. Once Samsung and SK Hynix started falling, forced selling fed on itself.

The result looks like more than a Korean stock-market accident. It threatens to become an American strategic problem.

The Earnings Didn’t Break

The operating results released during this selloff look strikingly different from the price action.

Samsung’s full second-quarter results, released after the U.S. close Wednesday, showed 171.5 trillion won in revenue and 89.5 trillion won in operating profit. Revenue rose 130% year over year, while operating profit increased 1,814%. The company’s operating margin reached 52.2%.

The concentration makes the source of those profits clear. Samsung’s semiconductor unit generated 89.2 trillion won in operating profit on 127.5 trillion won in sales, a 70% margin. Memory revenue rose 471% year over year as the company achieved record bit sales in both DRAM and NAND. Samsung expects demand for server DRAM, enterprise solid-state drives, and HBM to keep the market undersupplied during the second half, supported by continued AI infrastructure spending.

SK Hynix also reported record results, began mass shipments of its latest high-bandwidth memory (HBM), and said it had secured long-term agreements with roughly ten customers.

CXMT presents a genuine competitive threat, particularly in commodity memory. Its rise could eventually affect industry capacity and pricing. Analysts still believe it remains years behind Samsung and SK Hynix in frontier HBM, however. That technological gap is one of the most important pieces of daylight between China and the allied AI supply chain.

One widely circulated forecast projects combined 2029 operating income of $945 billion for Samsung, SK Hynix, and Micron Technology: $420 billion for Samsung, $365 billion for SK Hynix, and $160 billion for Micron.

Memory is notoriously cyclical, so we’d treat those figures as an aggressive scenario rather than a promise. Even a large haircut would leave an extraordinary profit pool.

The Reflexive Damage Crosses Borders

Samsung and SK Hynix dominate the Korean market and serve as global valuation anchors for memory stocks. When their shares collapse, investors don’t isolate the damage in Seoul. They mark down American competitors such as Micron and Sandisk, reduce exposure to semiconductor funds, and sell other AI infrastructure names caught in the same momentum and factor trades.

That pressure can then migrate into more speculative American technology companies. Lower public valuations raise the cost of equity, weaken acquisition currencies, narrow the initial public offering window, and make financing committees more cautious. Private-market marks update slowly; financing decisions don’t.

The final links in that chain are harder to measure in real time, but the direction is clear. Lower public comparables make it harder for venture-backed companies to raise money on attractive terms. That matters most in capital-intensive fields such as semiconductors, robotics, power systems, and advanced manufacturing, where promising companies can’t simply code their way around a funding drought.

We’ve argued that physical capacity increasingly matters more than flattering accounting aggregates. China is financing memory, robotics, energy, shipbuilding, and manufacturing capacity at tremendous scale. A leveraged market accident that weakens the capital base of America’s most important Asian technology allies works in China’s favor.

The selling crossed the Pacific before any production line changed.

Why Aren’t They Buying Their Own Shares?

Samsung and SK Hynix have strong balance sheets. Samsung ended the quarter with 190 trillion won in cash and 167.6 trillion won in net cash. That makes them different from Intel, which needed capital when the U.S. government acquired its stake.

Both Korean companies have returned capital to shareholders. Samsung announced a 10 trillion won repurchase program in 2024 and spent another 5.63 trillion won acquiring treasury stock during the second quarter. SK Hynix has discussed additional buybacks as its cash position has improved.

They could announce larger ones. A forcible repurchase would demonstrate management’s confidence in the earnings outlook, absorb forced selling, and exploit valuations that appear cheap relative to current profits.

The competing use of that cash is strategically important, though. Samsung and SK Hynix need to spend heavily on HBM, advanced packaging, leading-edge manufacturing, and research to preserve their lead over CXMT. SK Hynix’s recent Nasdaq listing also included newly issued shares, underscoring its preference for financing expansion rather than shrinking its equity base.

Keeping several generations of technological daylight between Korea’s memory champions and CXMT may create more long-term value than supporting this month’s share price. That tradeoff creates an opening for Washington.

The Intel Precedent, With a Difference

We defended the government’s Intel investment in a post at the time.

A non-controlling equity stake in a strategically important semiconductor company was industrial policy with taxpayer upside, not central planning.

Intel needed the money. Samsung and SK Hynix don’t.

President Trump should direct Treasury Secretary Scott Bessent and the Commerce Department to negotiate a capital-for-capacity agreement.

The United States would invest through newly issued preferred equity, warrants, or project-level securities. Samsung and SK Hynix would commit the proceeds to measurable increases in American HBM production, advanced packaging, research, and supplier capacity. Disbursements would occur as construction and production milestones were met.

There’s already a foundation. Samsung has planned more than $40 billion of investment in its Texas semiconductor complex. SK Hynix has a planned $3.87 billion HBM project in Indiana. A new agreement could accelerate those projects and expand their ambitions.

The securities should include dilution protection, a defined exit mechanism, clawbacks for missed commitments, and enough equity participation to reward taxpayers if the memory supercycle continues. South Korea could contribute matching incentives or guarantees, aligning both governments with the same capacity targets.

Buy Capacity, Demand Performance

The strategic asset here is the allied ability to manufacture the memory that makes advanced AI possible. This week’s collapse may eventually look like an extraordinary investment opportunity. A capital-for-capacity agreement would convert that dislocation into new production.

The deal would give each participant something valuable. Samsung and SK Hynix would receive help de-risking larger American investments. The United States would gain production, research, supply-chain resilience, and taxpayer equity upside. South Korea would strengthen its national champions without asking them to sacrifice the investment needed to stay ahead of China.

President Trump likes deals that combine industrial policy with a visible return. This one fits his model. Washington should buy capacity, demand performance, and participate in the upside when Korean memory stocks recover.

While We Wait For The AI Trade To Shake Out

Many U.S.-listed AI leaders are still being punished even as the companies supplying power, testing, storage, and memory report record results. The fundamental evidence and the price action are sending different signals, as we noted in our post earlier this morning.

None of the names we monitor passed either AI recovery screen last night. We’re keeping our entry bar high and preserving dry powder until the screens begin to confirm the turn. We do have on bullish and one bearish for today though.

A Bullish Biotech Trade…

Today’s bullish trade is a defined-risk bet on a biotech with Phase 3 data due in August, sourced from one of our Multibaggers accounts (as regular readers know, our Multibaggers are a subset of traders from our Market Watchers X list who have multiple, documented 100%+ recent winners). Its structure preserves uncapped upside while capping the downside if the trial fails.

…And A Bearish Software Trade

Today’s bearish trade came from our Bearish Rally Failure Screen. It’s an earnings-window structure on a richly valued software leader whose chart remains vulnerable.

The two trades call for different payoff shapes. The biotech position pays for discontinuous upside. The bearish position uses elevated event volatility and a short-dated put leg to reduce the cost of downside exposure through next week’s report.

Full details on both trades, including the underlying securities, exact structures, maximum entry prices, and pre-set exit plans below.

Today’s Multibaggers Trade

Cardiopulmonary biotech / Phase 3 binary theme

RSI: 56; Chartmill Technical Rating: 10; Setup Rating: 5; Fundamental Rating: 3.

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The Momentum Massacre Mostly Continues

The latest selloff in AI infrastructure stocks has created an uncomfortable split. The companies are reporting accelerating demand, expanding margins, and higher guidance. Their stocks are still getting hit.

The earnings argue that the AI buildout remains on track. The price action says the market is still reducing exposure to some of the companies that benefited most from it. Those are different signals, and treating one as a substitute for the other is how investors end up catching falling knives.

On X Tuesday night, we wrote that the reports and post-market reactions from three AI infrastructure companies were bullish for AI.

Overnight, SK hynix added a stronger data point—and a harsher lesson about this tape.

Four Checks Along the Supply Chain

The sequence started Monday with Celestica. Second-quarter revenue rose 62% year over year to $4.7 billion, adjusted operating margin reached a company record, and

management raised its 2026 revenue and earnings outlook. It expects revenue growth to accelerate again in 2027.

Tuesday broadened the confirmation. Bloom Energy reported record revenue of $1.07 billion, up 166% year over year, as product revenue rose 215%. It raised full-year revenue guidance to $3.9 billion–$4.2 billion, about twice last year’s revenue at the midpoint. Management said all the major U.S. hyperscalers, along with more than a dozen neoclouds, AI labs, and data-center operators, have approved its power systems.

Teradyne posted a second consecutive quarter of record revenue. Sales rose 104% year over year, earnings rose more than 300%, and memory-test revenue reached a record. Its third-quarter guidance reflects what management called robust AI-related demand. Seagate reported $3.6 billion in quarterly revenue, up 49% year over year, with gross margin expanding to 52.3% from 37.4%. It generated $1.1 billion in free cash flow and guided the next quarter to $4.1 billion in revenue.

The market rewarded those reports. Bloom rose 12.7% after hours, Teradyne rose 12.8%, and Seagate gained 6.6%. Celestica had already risen 10% Tuesday following its Monday report. Those moves show that the market can still reward strong execution, but they don’t constitute a broader recovery. Even at their after-hours prices, Bloom, Teradyne, and Seagate remained about 46%, 26%, and 28% below their respective late-June highs. Because the four companies occupy different points in the AI supply chain—manufacturing and networking, semiconductor testing, on-site power, and mass-capacity storage—their simultaneous strength makes a broad deterioration in AI infrastructure demand harder to square with the evidence.

The HBM Leader Gets Punished

SK hynix strengthened the fundamental case overnight. The company reported all-time-high results: revenue rose 257% year over year, operating profit rose 557%, and operating margin reached 76%. It began mass shipments of HBM4 during the quarter and has signed long-term agreements with around ten key customers.

The result nevertheless fell short of extremely high expectations. One analyst who anticipated the miss attributed it to SK hynix’s heavier mix of high-bandwidth memory, where average-selling-price growth lagged the conventional-memory market. SK hynix’s own report points to sustained AI demand, customer demand exceeding available supply, and additional supply requests from major technology customers.

The shares fell 9.4% in Korea, helping pull the Kospi down 6%. At the same time, CXMT, the newly-listed Chinese DRAM producer, rose 11.5% Wednesday to CNY52.42. That followed a 466% first-day gain Monday and a modest 4% retreat Tuesday. CXMT now trades near its debut high despite lacking SK hynix’s position in HBM.

That contrast points to positioning, expectations, regional capital flows, and forced deleveraging—not a clean investor referendum on AI demand. A record quarter can still produce a falling stock when the market expected an even bigger record.

What the Credit Bears Get Right

The strongest bearish argument concerns financing. The AI buildout is extraordinarily capital-intensive. Wider hyperscaler credit spreads, heavy data-center borrowing, and the difficulty of bringing enough power online deserve attention. If operating cash flow fails to catch up with capital spending, the buildout could slow.

Gavin Baker offered a useful counterpoint. Spot prices for GPU compute remain at least twice contracted rates, by his estimate. That suggests hyperscalers are under-earning on capacity sold under older contracts. As those contracts roll off, cloud revenue and operating cash flow could reprice higher, reducing the amount of debt needed to fund future construction.

That forecast still has to be proved. The current earnings are consistent with it: power demand is accelerating, test demand remains robust, storage margins are expanding, and the leading HBM supplier is signing multi-year customer agreements. Evidence that would challenge the thesis would include falling capital-spending plans, order cancellations, weaker memory agreements, rising inventories, or suppliers cutting guidance. This week’s reports moved in the opposite direction.

Let the Screens Call the Turn

The fundamental thesis and the entry decision remain separate questions. When positioning is unwinding, valuation alone doesn’t create a floor. A strong earnings report can produce another leg down if leverage, expectations, and technical selling dominate.

We created two dedicated screens to look for the turn. AI Profitable Recovery tracks AI-related companies with current earnings. AI Speculative Recovery tracks pre-profit companies whose upside depends more heavily on future execution. We review both every night, alongside Portfolio Armor’s Top Names and our Chartmill Trend & Consolidation Screen.

A candidate then has to pass additional checks: it should trade above a rising 50-day exponential moving average, remain absent from our Bearish Rally Failure Screen, and clear our fundamental, corporate-action, recent-exposure, and options-pricing reviews. We’ve also automated a weekly audit of our full-exit winners so that each is watched by the relevant screen for a possible re-entry.

No stocks passed either AI recovery screen last night. That’s useful information. It gives us a reason to remain selective and preserve dry powder while the tape is still damaging good companies along with weak ones. Fundamentals tell us where to look. The screens will tell us when to act.

When an AI name clears the relevant recovery screen and an attractive defined-risk structure is available, we’ll post a trade alert for it with the exact trade structure, maximum entry price, and pre-set exit plan.

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A Correction Splits The Opportunity Set

Corrections don’t make every falling stock a buy, and they don’t make every bounce sustainable. Our screens are separating names whose longer-term uptrends remain intact from names whose rebounds are failing inside broader downtrends.

That gives us three trades this morning: two bullish healthcare positions tied to identifiable catalysts, and one bearish earnings trade on a cyclical distributor. Both bullish candidates are above their 50-day exponential moving averages, and neither appears on our custom Bearish Rally Failure Chartmill screen. The bearish candidate remains below its declining 20-, 50-, and 200-day simple moving averages.

A Platform With Multiple Shots On Goal

Our first bullish candidate is a profitable gene-therapy platform with a commercial product that’s already scaling. This one comes to us from our Market Watchers X list. First-quarter global revenue rose 32%, gross margin was 95%, and the company ended the quarter with nearly $1 billion in cash, cash equivalents, and marketable securities.

Management has two registrational data readouts scheduled this year, while investors we follow see several additional second-half catalysts. The company reports Monday morning. There’s also speculation that a large pharmaceutical company could be circling (the flight tracker boys at it again), but we don’t need a takeover for the trade to work.

The obvious objection is event risk: earnings and clinical readouts can cut both ways, and the options reflect that. We’re answering it with a defined-risk combo entered for a credit, so we can make a modest profit on this if the stock goes sideways or even declines 10% or 15%, and we can more than double our money if it hits our target.

A Winner We Couldn’t Re-enter

Our second bullish candidate is a previous winner from our Multibaggers list that we tried to re-enter in Monday’s alert (as regular readers recall, our Multibaggers are a subset of our Market Watchers X List with multiple, recent 100%+ winners). That order didn’t fill, but the thesis hasn’t weakened. The stock finished Monday stronger, and its Chartmill Technical and Setup Ratings both improved to 8.

What changed is the geometry. We moved the call and put strikes higher to reflect the new share price, while tightening the maximum debit. The November long legs still span the company’s August and November earnings reports.

A Bounce Into Earnings, Not A Repaired Trend

Our bearish name is a national distributor tied to residential construction and repair-and-upgrade demand. First-quarter net sales were flat, and Organic Daily Sales fell 1% as roughly 3% price inflation masked lower volume. Management expects overall end-market demand to decline modestly in 2026.

The bullish counterargument is real: gross margin expanded 90 basis points and adjusted EBITDA rose 14% in the first quarter. The bearish case is that the operating improvement may not be enough if volume remains weak. The stock’s RSI has rebounded to 41, but its Chartmill Technical Rating is still 0, both its short- and long-term trends are down, and it reports Wednesday morning.

We’re deliberately using a shorter-dated structure here because this trade is partly an expression of the current correction. We don’t expect that correction to last as long as our usual trade structures do.

That’s why the structures differ. The catalyst-heavy platform uses a same-expiration credit combo. The former winner uses a hybrid that helps finance a November call with an October short call. The bearish earnings trade uses an inverted hybrid, selling an August put into elevated event volatility while preserving September downside exposure.

Full details are below, including the names and tickers, exact legs, entry limits, maximum gains and losses, and the pre-set exit orders we plan to place after any fills.

Today’s Market Watchers Trade

Commercial gene therapy / multiple-catalyst theme

RSI: 53; Chartmill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 6.

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Turning Winners Into Re-entry Candidates

The easiest way to lose a good setup is to stop watching a stock after a successful exit. Closing a position frees the capital, but it shouldn’t erase the name from the process.

We recently used OpenAI’s Codex to automate another part of our workflow. Each week, after we publish our Exits post, Codex reviews every fully exited winner and checks that each optionable U.S. name has the appropriate Chartmill alert—in this case, our Trend & Consolidation alert. Partial exits don’t count.

The purpose is simple: when a former winner clears our technical and fundamental criteria again, the alert brings it back into our review queue immediately. We can then price a fresh trade instead of relying on memory or treating the new setup as an extension of the old one.

One of those alerts fired Friday on a biotech winner we fully exited the previous week for a triple-digit return. The stock is back above its rising 50-day EMA, its RSI has reset to the low 50s, and it does not appear on our new bearish screen, “Bearish Rally Failure”. Monday’s bullish trade is a fresh position in that former winner.

A Rally That Couldn’t Repair The Trend

Our bearish candidate came from the Bearish Rally Failure screen. That screen looks for liquid, optionable stocks below their 20-, 50-, and 200-day moving averages, with those averages bearishly stacked, but whose RSI has rebounded into the 40–55 range. In other words, the stock has rallied enough to offer a potentially attractive entry without repairing its trend.

Monday’s candidate is a premium consumer brand with a strong balance sheet and a still-respectable fundamental rating. Those qualities can make a bounce look persuasive. What makes this setup bearish is the failed trend repair: revenue and earnings have deteriorated, price remains below all three key moving averages, and both its short- and long-term trends are negative.

We’re using defined risk on both sides: a long put spread to profit from renewed downside and a short call spread, capped by a protective long call, to help finance it.

Full details are below on both trades, including the maximum amounts we’re willing to pay for them, and the exit orders we plan to place immediately after they’re filled.

Today’s Multibaggers Trade

Obesity therapeutics / commercial recovery theme

RSI: 53; Chartmill Technical Rating: 7; Setup Rating: 7; Fundamental Rating: 6.

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Stocks or Exchange Traded Products

None.

Options

1. Call calendar on Calumet (). Entered at a net debit of $2.98 on 5/1/2026; exited the calendar at a net credit of $5.53 on 7/18/2026. Profit: 86% on premium outlay. Signal: PA Top Names.

2. Short calls on VivoPower (). Sold-to-open the October 16th, 2026 $12.50 calls for $0.97 per contract as part of a 4-leg hybrid combo on 6/22/2026; bought-to-close those calls for $0.20 per contract on 7/20/2026. Profit: 79% on premium collected. Signal: Market Watchers.

3. Put spread on 10x Genomics (). Entered the November 20th, 2026 $20/$15 put spread at a net credit of $1.70 on 5/15/2026; exited the spread at a net debit of $0.20 on 7/22/2026. Profit: 88% on premium collected (21% of max risk). Signal: Multibaggers.

4. Short calls on Wolfspeed (). Sold-to-open the September 18, 2026 $80 calls for $9.21 per contract as part of a 4-leg hybrid combo on 6/8/2026; bought-to-close those calls for $0.20 per contract on 7/24/2026. Profit: 98% on premium collected. Signal: Market Watchers.

5. 4-leg hybrid combo on Frequency Electronics (). Entered at a net debit of $2.70 on 2/11/2026; bought-to-close the May 15th, 2026 $65 call for $0.20 on 4/29/2026; exited the May 15th, 2026 $45/$40 put spread at a net debit of $0.20 on 5/5/2026; sold the August 21st, 2026 $60 call for $17.55 on 7/21/2026. Profit: 535% on net debit (188% of max risk). Signal: Market Watchers.

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Stocks or Exchange Traded Products

No exits this week. I’ve focused on options instead of our basic strategy, which involves buying stocks and ETFs. Nevertheless, the performance of our system’s top names over the next six months continues to be strong, as you can see below.

Options

Five Exits, Five Winners

As I noted in Thursday’s market commentary, investors were repricing AI capital spending, $100 oil, and a 10-year Treasury yield near 4.7%. Against that backdrop, all five options exits this week were profitable, ranging from 79% to 535% (our losing options exits tend to collect on OpEx days, because our winners tend to trigger our pre-set exit orders before expiration; you can see examples of those in July’s OpEx day Exits post).

Only one of the five—the Frequency Electronics hybrid—closed an entire position. The other four harvested gains from individual legs while preserving exposure we still wanted.

Letting Each Leg Do Its Job

We bought back VivoPower and Wolfspeed short calls for $0.20 after selling them for $0.97 and $9.21, respectively. Those 79% and 98% gains removed the upside caps from our original trade structures.

We exited the 10x Genomics put spread at $0.20 after opening it for a $1.70 credit, locking in 88% of the premium while leaving the November $25 call open. Calumet’s calendar nearly doubled, returning 86% on premium outlay.

FEIM’s Full Arc

Frequency Electronics shows the full hybrid arc. We entered for a $2.70 net debit in February. We later paid $0.20 to remove the short May $65 call and $0.20 to exit the May $45/$40 put spread. This week, we sold the August $60 call for $17.55. The completed trade earned 535% on net debit and 188% on max risk.

The short call and put spread financed and defined the trade at entry. Closing them cheaply let the long call keep compounding through FEIM’s rally.

This wasn’t the first time we’ve traded FEIM; before it had options traded on it, we bought the shares last year:

• Frequency Electronics (FEIM -1.22%↓): Bought at $20.60 on 7/14/2025; sold at $38.00 on 12/12/2025. Profit: 84%.

Orders Before Headlines

The week’s debate—oil supply risk, higher yields, and whether AI spending will earn an adequate return—remains unresolved. Standing orders handled the parts we could control: harvesting short premium near its floor, removing caps when they became cheap, and selling long options or calendars when they reached attractive prices.

Five exits, five winners. The larger lesson is the sequence: define risk at entry, let the financing legs work, and give the remaining upside time to develop.

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A Market That Punishes Chasing

Thursday’s market commentary in our weekly Top Names post described this week’s central tension: AI demand is still accelerating, but oil above $100, higher bond yields and anxiety about capital intensity have raised the market’s return threshold.

The Nasdaq’s 2.2% drop showed how quickly that pressure can overwhelm strong operating results.

This is a difficult tape for bulls and bears. High-quality growth stocks can fall after good earnings, while heavily shorted biotechs can squeeze ahead of binary catalysts. The response is tighter selection and firm limit prices.

On the long side, every Friday candidate had to trade above its rising 50-day exponential moving average and stay off our new bearish rally-failure screen. When the options market (as of Thursday’s close) didn’t offer enough edge, we passed on the trade. We’ll use that same discipline today, if the options market pulls away from us.

Three Trades, Two Directions

Our two bullish candidates passed our main bullish Chartmill screen, Trend & Consolidation, Thursday night with Setup Ratings of 7. One sells the hardware and infrastructure behind the AI buildout; the other is a profitable biotech whose product sales grew >40% last quarter and which reports earnings next week.

We’re also taking another run at Thursday’s bearish biotech setup.

Yesterday’s inverted combo never filled; today’s trade uses a broken-wing put butterfly instead. The thesis is unchanged; the payoff geometry is better suited to the option market we have now.

Full details are below on all three trades, including the maximum amounts we’re willing to pay for them, and the exit orders we plan to place immediately after they’re filled.

Today’s First Market Watchers Trade

Commercial biotech / earnings setup theme

RSI: 56 | Chartmill Technical Rating: 9 | Setup Rating: 7 | Fundamental Rating: 7

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The Cost Of The Boom

Last week, we wrote that the market was fighting an expanding Iran war and a hard rotation out of former AI leaders. Thursday fused those pressures into the worst session in a month. Brent crude cleared $100 after attacks on two Saudi tankers threatened the Red Sea route now carrying diverted Gulf exports, while the 10-year Treasury yield touched 4.7%. The S&P 500 fell 1.2%, the Dow 1.0%, and the Nasdaq 2.2%.

The oil move is a tailwind for the energy-related stocks our rankings began surfacing in early April, when four energy names entered the top ten.

By April 20, seven of the ten names in our ranking generally benefited from firmer energy prices.

The Market Sold The Spending

The other pressure came from earnings. Alphabet beat estimates, but its shares fell 7.1% after it raised this year’s capital-spending forecast to $195–$205 billion. Tesla dropped 14.5% after weaker-than-expected profit. The market was repricing capital intensity, fuel costs, and financing costs all at once.

Alphabet’s operating evidence was far stronger than the share-price reaction suggested. Revenue rose 24% year over year, Google Cloud revenue accelerated 82%, Cloud backlog reached $514 billion, and the company’s model APIs processed about 22 billion tokens per minute, up from 16 billion in the prior quarter. Management also said demand remained supply constrained.

The Suppliers Answered

Earlier Thursday, Nokia added a supplier-side confirmation: sales to AI and cloud customers rose 105% year over year, optical-network sales grew 20%, and AI-and-cloud order intake reached €2.8 billion. Nokia expects roughly half those orders to convert to revenue over the next 12 months and says supply remains the industry’s main constraint.

This is the week’s central tension. AI demand keeps accelerating, while the market raises the return threshold for every dollar spent to serve it. Higher oil and bond yields make that threshold tougher still. The companies selling scarce hardware and infrastructure can keep growing even while their customers’ multiples compress.

What Our Rankings Are Saying

Eight of this week’s top ten names have direct exposure to semiconductors, memory, chip-testing equipment, or data-center cooling. The ranking remains concentrated in the physical AI buildout after one of the roughest days for that trade this year.

That concentration deserves both attention and discipline. Our system continues to find its highest estimated six-month returns in the picks-and-shovels layer, while Thursday’s tape demands wider stops, controlled position sizes, and patience. The basic strategy below lets the ranking select the names and trailing stops determine when price action has overruled the forecast.

Our Basic Strategy

Our basic strategy is to buy equal dollar amounts of the Portfolio Armor web app’s top ten names, put trailing stops of ~20% on them, and replace them with names from the current week’s top ten when we get stopped out of a position—there are no options involved in this strategy.

Another Use For Our Top Names

We also use our top names in options trades, such as this one we exited last week:

• 4-leg hybrid combo on Targa Resources (TRGP -0.22%↓). Entered at a net debit of $2.45 on 4/20/2026; exited the July 17, 2026 $210/$200 put spread at a net debit of $0.20 on 5/14/2026; then sold the September $270 / July $280 call calendar for a net credit of $18.25 on 7/15/2026. Profit: 637% on net debit (125% on max risk). Signal: PA Top Names.

A Top Names Performance Update

Before we get to this week’s top ten names, let’s look at the final, 6-month performance of our top ten names from January 22nd.

Over the next 6 months, our top ten names from January 21st, 2026 returned -7.36%, versus +9.08% for the SPDR S&P 500 Trust ETF (SPY 0.23%↑).

So far, we have 6-month returns for 160 weekly top names cohorts since we started this Substack at the end of December, 2022.

[Skipping ahead so this post doesn’t exceed email length—you can see the top names returns for every week here]

And as you can see above, our top names have averaged returns of 18.16% over the next six months, versus SPY’s average of 9.67%. You can see an interactive version of the table above here, where you can click on each date and see a chart showing each of the holdings that week.

This Week’s Top Names

Below are Portfolio Armor’s current top ten names as of Thursday’s close.

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AI Demand Is Turning Into Orders

Alphabet just gave the AI-infrastructure bears a difficult set of numbers. Second-quarter revenue rose 24%, Google Cloud revenue jumped 82% to $24.8 billion, and the company spent $44.9 billion on property and equipment—about twice as much as it did a year earlier.

Nokia supplied the next layer of evidence Thursday morning. Its AI & Cloud sales rose 105%, order intake reached €2.8 billion, and management expects about half of those orders to convert to revenue over the next 12 months. Its chief constraint remains supply. Texas Instruments added a broader confirmation: revenue rose 23%, with growth led by industrial, data center and automotive demand.

That evidence leads into our first trade, on one of our system’s current Top Names, which is a profitable supplier to the semiconductor companies behind the buildout. Its shares have corrected with the rest of the AI stack, but its long-term trend remains intact, and our trade is structured to let the options market pay us to take bullish exposure.

Two Biotech Catalysts, Opposite Directions

The other two trades came from the same Multibaggers source, but they point in opposite directions (recall that our Multibaggers are a subset of accounts from our Market Watchers X list with recent, documented 100%+ winners). One is a bullish trade ahead of a September courtroom catalyst where a favorable settlement or verdict could force a rerating. The other is a bearish trade ahead of a Phase 3 leukemia readout where the trial design may leave little statistical cushion if the control arm outlives the original assumption.

These are three different expressions of the same discipline: pair a concrete catalyst with a defined-risk structure and demand an attractive price. One trade benefits from sustained AI investment, one from a favorable legal outcome, and one from a clinical failure.

Today’s Top Names Trade

Semiconductor equipment / AI-capacity theme

RSI: 48 | Chartmill Technical Rating: 9 | Setup Rating: 5 | Fundamental Rating: 7

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Looking Beyond The Obvious Leaders

Tuesday night’s screens widened the opportunity set beyond the obvious AI leaders. They surfaced a regional bank after a strong quarter, a semiconductor-equipment company rebounding from a sharp pullback, a European defense-electronics contractor ahead of earnings, and a profitable fintech consolidating after a deep correction.

Screening For Rebounding AI-Adjacent Names

The semiconductor-equipment name comes from a new screen we developed over the weekend, and detailed in our “When To Get Back In Memory Stocks” post.

We call that screen “AI Profitable Recovery” (we have a separate one for speculative AI-adjacent names that aren’t currently profitable), and consists of these criteria:

• U.S. listing and listed options.

• ChartMill Setup Rating of at least 5 (a 0-to-10 measure of entry and exit quality).

• ChartMill Relative Strength (CRS) of at least 50 (performance versus the rest of the market).

• A price above the 5-day moving average and a rising 200-day moving average.

• A rising 14-day RSI between 30 and 50.

• A ChartMill Health Rating of at least 5.

• A next-fiscal-year revenue estimate that is unchanged or higher over the previous month.

Screening For Strong Fundamentals And Setups

The bank comes from our “Really Time To Buy?” screen. That one includes these strict criteria:

• U.S. listed and listed options.

• Chartmill Setup Rating of at least 7.

• Chartmill Technical Rating of at least 6.

• Piotroski F-Score of at least 8.

• PEG ratio (trailing 5 years and next year) less than or equal to 1.

That bank also just reported $0.54 in earnings per share, up from $0.45 a year ago. The defense contractor announced an order for more than 50,000 thermal cameras and reports next week. The fintech carries an 8/10 Chartmill fundamental rating.

The signals came independently. The European defense contractor appeared in our main Trend & Consolidation screen, and the fintech came from our 7777 screen that requires ratings of 7 or higher for profitability, growth, health, and valuation.

Their Relative Strength Index (RSI) readings range from 50 to 56—a constructive middle band that leaves room for the underlying catalysts to work.

Matching The Structure To The Setup

We’re using three different options structures across these four names, applying the most appropriate one to each.

We priced each package with Black-Scholes, Bjerksund–Stensland, and CRR/binomial models, then set our alert entry prices at or better than the most conservative fair value. That discipline gives us room to participate without turning a good setup into a bad entry.

Full details, easily actionable, are below, including our pre-set exit orders, so we can profitably exit these trades automatically if the underlying stocks go our way.

Today’s “Really Time To Buy?” Trade

Regional banking / improving-profitability theme

RSI: 53; Chartmill Technical Rating: 7; Setup Rating: 8; Fundamental Rating: 4.

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And raised our max net debits for them based on their new fair values. At these net debits, we’d still be getting in at a slight discount to fair value.

Today’s First Market Watchers Trade

Commercial-stage B-cell therapy / multiple-sclerosis expansion theme

RSI: 54; Chartmill Techni…

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Time Is A Bomb

I’ve borrowed the title from a track from the new Metric album.

Time is an important factor in each of today’s trades, particularly our biotechs with their catalysts ahead.

A $6 Billion Stress Test

One of today’s trades is in a major airline while the Persian Gulf conflict keeps war risk and fuel costs elevated. Its long call expires in January, giving both headwinds time to ease.

The carrier has already shown it can absorb a severe fuel shock. It grew second-quarter operating revenue by 16% year over year and raised full-year adjusted guidance to $9–$11 in earnings per share (EPS), even though it now expects nearly $6 billion in additional 2026 fuel expense versus its expectation at the start of the year.

It recovered about half of the second-quarter fuel increase through revenue and expects to recover 80%–90% in the third quarter and 100% in the fourth. If the conflict cools and oil follows before January, the company could get relief from both fuel costs and war-related route risk while its pricing catches up.

Three Biotech Clocks Are Ticking

One of today’s biotech names is already a commercial business. It generated approximately $205 million in first-quarter global revenue and raised its full-year target to approximately $925 million. Its next pivotal readout—Phase 3 data for a subcutaneous version of its approved B-cell therapy—is expected around year-end 2026 or early 2027, before our February call expires.

Another recently reported that its first Phase 3 depression study met its primary endpoint and every key secondary endpoint. It has two more Phase 3 anxiety readouts expected this quarter: one in early Q3 and another in late Q3.

The third reported a 53% overall response rate at the recommended Phase 2 dose of its lead multiple-myeloma drug. It ended March with $268.3 million in cash and investments, enough to fund operations through the end of 2028, and its expanded Roche collaboration brought in $20 million upfront.

That last name appeared in a recent alert, but our order never filled. The shares are lower now, and we’ve improved the structure: more long calls, no short call, uncapped upside and less than our usual $750 risk budget.

The Screen And The Price

Chartmill’s Technical and Setup Ratings measure trend quality and entry quality on a 0–10 scale. RSI (Relative Strength Index) is a 0–100 momentum gauge. All four names have Technical Ratings of at least 7, Setup Ratings of 6 and RSIs between 40 and 58.

We also priced every structure with Black–Scholes, Bjerksund–Stensland and Cox–Ross–Rubinstein binomial models. Each published maximum debit is at or below the most conservative model-consistent value. If the market doesn’t give us those prices, we won’t chase.

Paid subscribers will find the names, structures, maximum entry prices and exit plans below.

Today’s First Market Watchers Trade

Commercial-stage B-cell therapy / multiple-sclerosis expansion theme

RSI: 54; Chartmill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 5.

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And got a fair value of $0.67 for it, so I raised the max net debit to $0.65:

Today’s Multibaggers Trade

Data-center power / industrial turnaround theme.

RSI: 50; ChartMill Technical Rating: 8; Setup Rating: 6; Fundamental Rating: 3.

Our Multibaggers name is Methode Electronics (MEI). It …

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The Demand Says Otherwise

After the crash in memory stocks and other AI-related names, it’s fair to ask whether the AI boom itself is rolling over. The clearest answer may not be in a chip chart, but in what customers are willing to pay—and what AI providers still can’t supply fast enough.

Last week, I upgraded to Anthropic’s $100-per-month plan. This weekend, after running into the limits of my current OpenAI plan, I upgraded again—to OpenAI’s $200-per-month plan.

That sounds extravagant until you’ve used an AI assistant that is smarter than any human you could hire for 50 times as much money. The tedious spreadsheet job that would have taken you hours gets done in minutes. The research project that would have consumed an afternoon comes back before your coffee gets cold.

It’s Not Just Me

Moonshot AI said this weekend that Kimi K3 received “far more love” than expected and that demand over the previous 48 hours had pushed close to the limits of its capacity. It temporarily paused new subscriptions, prioritized compute for existing subscribers and said it was adding capacity as quickly as possible.

Cheaper intelligence isn’t reducing demand for compute. It is creating more uses, more users and more willingness to pay. Intelligence is addictive—and despite the correction in AI-related shares, the AI boom is still happening.

The Less-Obvious AI Bottlenecks

The selloff is a reminder that price, positioning and entry matter. But it would be a mistake to confuse a sharp correction in AI-linked shares with evidence that end demand has disappeared.

For today’s trades, we’re looking away from the most crowded parts of the stack. AI can generate a marketing campaign in seconds, but it still needs to know which customer matters. And none of those models can run if the next generation of data centers can’t move enough power through their racks.

The first company operates an AI-driven marketing platform built around proprietary customer data. As content and campaign creation get cheaper, reliable identity, decision-making and measurement become scarcer. Its latest quarter included 50% revenue growth, higher full-year guidance and rapid adoption of its new AI agent.

The second company is a less-obvious physical-infrastructure play. It makes power-distribution products, including busbars, for data centers and other industrial markets. Management expects growth in 800-volt busbars as data-center architectures evolve. Its latest quarter also showed a real operational turn: adjusted EBITDA improved to $26.9 million from a $7.1 million loss a year earlier, while Industrial-segment sales rose 14.2%.

What Changed Friday

Both ideas first came to our attention in May—one through our Market Watchers list on X and the other through our Multibaggers list.

For newer readers, Multibaggers are Market Watchers with documented recent winners of 100% or more.

We didn’t trade either idea then because the technical entries weren’t ready. That changed Friday. The theses aren’t new; the entries are.

The risks are different, so the structures are too. The marketing-software name reports earnings in early August, and we’re preserving uncapped upside through that catalyst. The industrial name remains a turnaround—full-year sales declined 2.8% and it still reported a net loss—so we’re using a nearer-dated short call to help finance the position while keeping the downside defined.

Paid subscribers will find the names, exact structures, maximum entry prices and exit plans below.

Today’s Market Watchers Trade

AI marketing / customer identity theme.

RSI: 56; ChartMill Technical Rating: 9; Setup Rating: 6; Fundamental Rating: 5.

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