Positioning For The Next Move Higher For Stocks

Bearish signals do not always signal down but sideways too

Last weeks article was titled “time to be cautious”, I guess for the bears was correct because they had their heads handed to them if they shorted this rocket ship. What was giving me signals for a bearish move was just consolidation before a next leg higher

Don’t mind all my volume profile levels but I posted this to show where I think we finally top out and I think you get the hint at the top of this channel we have a good ways to go before we hit that TL. But when we hit it last time mid July 2024 that was the top in SOXL 0.00%↑ till liberation day lows at $7 now pushing $130, so until we hit that trendline I think we ride the wave higher.

AXTI 0.00%↑ didn’t disappoint although I didn’t play it directly I was in AAOI 0.00%↑ Friday expiry 180 calls $.80 to $5.70 as well as my earnings play for AAOI 0.00%↑ that I grabbed at $2.50 is now pushing $10 a contract. As I said in my note Friday, play what’s working and play for keeps.

AAOI 0.00%↑ is pushing higher and premiums when I bought my earnings plays made sense but if you want to get in now to play it I would suggest wait or play common/2x etf AAOX 0.00%↑ instead. I plan on holding my calls into at least Wednesday as LITE 0.00%↑ will report Tuesday night and AAOI will move on it. If we get a big rip on LITE in AAOI I think it will pull a SNDK 0.00%↑ and not go up on the release Thursday night so have to play this one by ear going into the numbers if it runs into the release.

One stock I really like into earnings is ALAB 0.00%↑ as it’s no where near its ATH and good earnings Tuesday night could gap this one substantially.

I’m in the $250 calls for May monthly opex, gives me an extra week and this earnings season has shown stocks can move on good earnings as you see AXTI 0.00%↑ SIMO 0.00%↑ have ripped faces and continue the days after higher.

What’s really happening is the earnings were not supposed to be as good as they have come in as of now we are tracking greater than 20% earnings growth this quarter which is pretty unprecedented as everyone was the most negative I have seen in awhile going into earnings. So between Iran creating a massive negative environment with the strait being closed, rates high, people spreading fud about midterm years being highly negative and a hedge fund manager running the treasury we set up a perfect storm to trap all the shorts at 6300 while bringing fears of nuclear war just to do a 180 and talk of peace in Iran brought the biggest rip higher not seen since the dotcom bubble. Now we have volatility crush adding more fuel for a grind higher while earnings continue to come in better than expected we could see another move higher till the fall. Obviously we can always see a correction after this type of move but until we hit that upper TL on the /nq we can keep moving higher through out the year.

I am even starting to warm up to bitcoin as we keep consolidating here under 80k I want to keep an eye the longer we sit here the more potential energy we are building to rip higher again. Over 80k I am looking for mid 90’s for a minimum target, as well as the usual players MSTR 0.00%↑ COIN 0.00%↑ IBIT 0.00%↑ BITX 0.00%↑ will be in play once bitcoin gets moving higher.

TLDR- I am bullish as the bear thesis didn’t play out, I’m long semi’s and other tech. We will see corrections but dips will be bought until we get to the upper TL later this year.