Trade Alert: Still Bullish, More Selective
Bullish options bets on our system's #1 name from Friday's close, and three of our Market Watchers names, all of which cleared our tightened technical screens.
Tightening The Screens
Friday’s market action was sharp, especially across AI-related and higher-beta momentum names.
That doesn’t change our view that the best AI-adjacent themes still have room to run. But it does mean we want to be more selective about where we add exposure.
So for today’s alert, we tightened the screens. We wanted names with Relative Strength scores closer to the center of our Goldilocks zone, Chartmill setup ratings of 6 or higher, and overall Chartmill technical ratings of 7 or higher. In today’s case, all three names had maximum overall technical ratings of 10 out of 10.
We also paid attention to the ADX / directional-movement readings. ADX measures the strength of a trend, while the directional-movement lines indicate whether buying pressure or selling pressure is dominant within that trend. In the three names below, those readings still showed bullish trend support after Friday’s shakeout.
That’s the profile we wanted here: names with enough trend strength, setup quality, and relative-strength discipline to justify adding exposure selectively after a sharp pullback.
Using Volatility For Cushion
The other adjustment is structural.
We’re using options expiring roughly six months from now, which gives these trades time to work and gives the current market stress a chance to move into the rearview mirror. We’re also using the spike in volatility to improve the financing side of the trades.
When option premiums rise, we can often sell puts further out-of-the-money and still collect enough premium to help fund the upside. That gives us more downside cushion than we would have had under calmer market conditions.
That’s the balance we’re looking for here: stay bullish where the screens still support it, but demand better entry structures after a violent tape.
Today’s Themes
Today’s Top Names trade is an infrastructure and power-project execution name that ranked at the top of Portfolio Armor’s system and previously worked well for us last fall.
The second trade is a semiconductor infrastructure name tied to AI connectivity and data-center buildout. It pulled back hard Friday, but it still cleared our tightened screen, and the option structure gives us defined risk with favorable financing.
The third trade is a power semiconductor / silicon carbide name. This is the more speculative of the three, but it gives us a way to add exposure to a beaten-down part of the AI power architecture theme without relying on a naked long call.
The fourth trade is tied to AI data-center cooling. As AI workloads push power density higher, thermal infrastructure becomes part of the same buildout story as power, chips, and optical connectivity. This gives us another way to participate in AI infrastructure without simply adding another semiconductor trade. It also cleared our tightened technical screens, so we’re using the post-selloff volatility to structure the trade with defined risk and put financing well below the current stock price.
We remain selectively bullish. Friday’s stampede didn’t make us abandon the themes that have been working, but it did raise the bar for new entries.
These are the names and structures that cleared that higher bar.
Today’s Top Names Trade
Infrastructure / power-project execution theme
