Trade Alert: Browsers, Payments, And Psychedelics
Three asymmetric trades for a market that is rewarding selectivity.
Respecting The Damaged Tape
Earlier this week, we made the case that the AI buildout is accelerating. The earnings evidence still supports that view. The tape, however, has continued to punish many of the chip, memory, and other momentum names associated with it.
There’s no reason to fight that rotation now. When those names pass our technical screens again, we’ll revisit them. Today, we’re directing new exposure toward three setups whose catalysts and technical pictures look cleaner.
Two originally came from our “Really Time To Buy?” Chartmill screen. That one’s extremely selective, limiting itself to stocks with options traded on them in the U.S. that have technical ratings of 6 or higher, setup ratings of 7 or higher, PEG ratios of less than 1, and Piotroski F-scores of 8 or 9. The third comes from one of our Multibaggers accounts. As regular readers know, Multibaggers are a handful of accounts from our Market Watchers X list with documented recent 100%+ winners.
Three Different Setups
Our first trade is on a growing browser-software company that has been incorporating AI features into its products. It has strong Chartmill ratings, and it’s a previous winner for us.
Our second is on a payments and embedded-finance company. It has attracted preliminary acquisition interest from an insider-led group, although we view that as additional strategic optionality rather than the reason for entering the trade.
The third is on a late-stage psychedelic-medicine developer with recent Phase 3 progress. We already have an in-the-money trade on the company, but the latest sector developments make additional exposure worth considering.
Big Pharma Validates Psychedelic Medicine
Eli Lilly agreed Thursday to acquire AtaiBeckley for $2.8 billion upfront, plus a contingent-value right potentially worth another $1 billion.
We already have an uncapped $6 call on ATAI from this April trade alert. More broadly, Lilly’s acquisition provides additional validation for the psychedelic-medicine pipeline.
In each of today’s trades, we’re using options volatility to lower our entry cost while keeping the downside measured.
Today’s First Chartmill Trade
AI browsers / mobile-browser growth theme
RSI: 57 | Chartmill Technical Rating: 8 | Setup Rating: 8 | Fundamental Rating: 7
