Trade Alert: AI Infrastructure And Open RAN
Bullish options bets on two names that pass our tighter technical screens to avoid falling knives.
Another Falling-Knife Check
In light of current market conditions, we’re adding another technical screen to our process: new bullish trade candidates should be trading above their 50-day exponential moving average.
Relative Strength Index, Chartmill Technical Rating, and Chartmill Setup Rating already do a lot of work for us. But in a chaotic tape, a stock can look “not overbought” simply because it has fallen hard and paused. The 50-day EMA gives us one more sanity check.
Like our other technical screens, this doesn’t mean a stock that passes won’t later fall through that level. It means it isn’t in the process of falling through it now. It may seem like common sense to try to avoid falling knives, but sometimes we need rules to keep ourselves from doing that.
Back To The Barbell
Today’s two trades sit on opposite sides of our barbell.
On one end, we have a high-convexity trade in a micro-cap previous winner for us. We exited a prior options trade in this name last month for a gain of more than 500%. The stock has since pulled back roughly 50%, but management has now announced a share buyback and ended its ATM program.
That matters because the dilution story had been one of the obvious overhangs. Remove that overhang, add current short interest around 28%, and you have dry kindling if a new catalyst hits.
On the other end, we have a larger-cap AI-infrastructure trade. This one sits in the enterprise AI / data-center hardware lane: servers, infrastructure, and the physical systems enterprises need as AI moves from pilot projects to real deployments.
That side of the barbell is less explosive, but it’s also cleaner. The theme is current, the business is tied directly to AI infrastructure spending, and the chart is still above its 50-day EMA.
One trade gives us speculative upside torque. The other gives us a more established AI-infrastructure setup, but one that can still give us a >150% return if things go well.
Full details below.
Today’s First Market Watchers Trade
Enterprise AI / data-center infrastructure theme
Screen data: RSI 57; Chartmill Technical Rating 9; Chartmill Setup Rating 8; Chartmill Fundamental Rating 6; trading above its 50-day EMA.
