Trade Alert: Paying More For Stronger Evidence
A second swing at an AI bottleneck, plus a photonics reentry.
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 (GFS 0.00%↑) 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.
