Sometimes The Best Trade Is The One You Just Exited
Why we got back in an AI name today after exiting a winning trade in it yesterday.
Sometimes The Best Trade Is The One You Just Exited
This morning my subscribers and I did something that feels counterintuitive to a lot of investors:
We put on a new bullish trade in a stock I had just exited yesterday for a solid gain.
If that sounds reckless, let me explain why it’s not—and why these situations can be some of the highest-quality setups in markets driven by secular megatrends, like we’re seeing now with AI infrastructure.
Our Top Names Don’t Care About Our Feelings
One of the advantages of running a systematic process is that it doesn’t get sentimental.
Portfolio Armor’s Top Ten Names list updates daily and ranks stocks by their estimated total return over the next six months. Over the last three years, these names have averaged:
📈 20.2% forward 6-month returns
vs.
📉 10.13% for SPY over 127 rolling 6-month periods
Details here:
https://portfolioarmor.com/performance-top-names
The important part isn’t perfection—it’s persistent outperformance. When a stock stays near the top of that list even after a big move… that’s a tell.
Case Study: Credo Technology (CRDO)
(aka: one of the most important companies many investors have never heard of)
CRDO wasn’t a meme stock or hype name when it landed at #1 yesterday—it’s a pure-play picks-and-shovels company for the AI boom.
Here’s the elevator pitch:
Data centers running Nvidia GPUs need far more bandwidth at 800G and 1.6T speeds.
CRDO builds the connectivity chips and cables that make that possible.
Every AI server rack built by hyperscalers needs these components.
It’s not an exaggeration to say CRDO is one of the quietest beneficiaries of the entire AI build-out.
This is why, after jumping ~17% in after-hours trading Monday and giving some back Tuesday to finish +10%, CRDO still ranked #1 on our system—not because of the pop, but despite it.
That’s exactly the kind of signal I pay attention to.
Yesterday’s Exit… And Today’s Re-Entry
Yesterday, we exited a trade in Credo that we had entered in August:
4-leg combo on Credo Technology Group (CRDO 0.00%↑). Entered at a net debit of $2.97 on 8/15/2025; exited the put spread at a net debit of $0.20 on 9/8/2025 and exited the call spread at a net credit of $16.05 on 12/2/2025 (so, from $2.97 to $15.85).
Profit: 434% on premium outlay (159% on max risk).
Normally, after a win like that, traders swear off a name for a while.
Systems don’t. And this morning, CRDO was still sitting at the top of the list.
So today I put on a new, asymmetric trade in it—harvesting elevated implied volatility to help finance the upside. For those who follow my daily trade alerts, the details are here:
👉
I actually prefer when a top name dips post-earnings—it makes re-entering cheaper—but even after the move this week, the risk/reward was strong enough to justify going back to the well.
Why This Pattern Works
There’s a simple but uncomfortable truth in markets:
The stocks that keep showing up as buys do so for a reason.
It’s not magic. It’s fundamentals + flows + catalysts + volatility structure aligning in a favorable way.
CRDO is a textbook example:
Secular tailwind (AI bandwidth bottleneck)
Explosive revenue growth
Increasing profitability
Institutional accumulation
Elevated IV that allows for efficient financing of bullish structures
When you see that combination consistently—before and after big moves—walking away just because you already won is often the wrong instinct.
Don’t Be Afraid To Go Back To The Well
If you’ve ever ridden a winning trade, closed it, and then felt frustrated watching the stock keep running, you’ve felt this dynamic firsthand.
The skill is not predicting the future—it’s identifying when a name remains a top-tier opportunity even after you’ve taken profits.
Sometimes the best trade really is the one you just exited.