If you’ve been following along, you already know. We want our offense on the field. We’re going long.
For baseball folks, we’re putting the pinch hitter in. We’re looking to go yard.
Welcome to the growth chronicles.
Over the coming weeks, I’ll be doing a series of posts on the most risk-on areas of the market.
The list of industry groups that are in uptrends continues to grow, fueled in large part by the speculative growth theme.
I’m going to cover the ones I’m most interested in and talk about the specific stocks I’m buying.
This week, it’s all about space and exploration.
While the market awaits the much-anticipated SpaceX IPO, I think many investors will be surprised at just how many options we already have to play this theme.
There is even an index for it. Here’s the ARK Space Exploration & Innovation ETF:
ARKX is raging higher out of a rounding bottom pattern just as it breaks out from a multi-year downtrend versus the S&P 500.
This means the path of least resistance is now higher for this group of stocks. And better yet, the relative trend suggests we can anticipate them to assume more of a leadership role in the future.
This is really all we’re looking for when we make the decision to go fishing in a particular pond of stocks.
Uptrends and relative strength.
Write it down.
Say it ten times.
Tell it to your friends.
Whatever you have to do to remember it. But it’s really all about those two things.
I believe anyone can make money consistently trading primary trends and leadership.
It’s not rocket science.
But, let’s talk about some stocks that are engaged in the business of rocket science.
Once we spot an industry group or area of the market that we want to be long, we drill in and find the strongest names.
Here’s Rocket Labs $RKLB:
RKLB has become the poster child of the space trade recently. It’s about a 4-5x just off the August lows and has been driving much of the performance in ARKX with a roughly 10% weighting in the fund.
I got in back in September when the base was breaking out and I’ve been selling into this week's strength.
I don’t think it makes sense to buy RKLB here. But it’s a great roadmap for what its peers can do, and it speaks to the momentum and flows these stocks are seeing right now.
Let’s talk about some that are more actionable. Trimble $TRMB is another top 5 fund holding.
TRMB crushed their earnings report last week and popped higher from a textbook rounding bottom pattern. We call this a decisive resolution.
I’m looking to buy this one in the coming days and weeks. It’s either going to happen on strength above the pivot highs or weakness back toward the base breakout level.
Ideally, it happens on strength above 75 and corresponds with a breakout in the relative trend.
The next two are space stocks, but what I really like about them is they may be below even Cathie Woods’ line. They are not included in ARKX. And that’s exactly the kind of junk I’m looking for right now.
Here’s $ASTS:
I told a trader friend I was buying the Space Mobile today, and he laughed at me. He either assumed it was a meme coin or a joke. It’s real. And I’m really long.
I’ve been re-deploying the RKLB proceeds into this one the past few days.
I love the coil here. It saw major momentum off the lows this spring, rallying roughly 1,700%.
ASTS has been consolidating and digesting gains in a continuation pattern for the past three months. It is happening right at the old all-time highs from 2021.
I’ll cut half there and the other half at the pivot lows in the event I’m wrong.
And I’m using the VWAP from the August high for confirmation. We tested it and failed the last two days. I think it goes any day now.
They just reported after the bell and the headline shows a huge miss. I’m not even going to look at the report. Fundamentals literally don’t matter in these instances.
The company is trying to create an internet network in space. Good luck valuing that. The fact they have quarterly revenue of $1M is impressive.
Here’s a stat that does matter for ASTS. They have a 33% short interest. Wow.
Last but not least, here’s Intuitive Machines $LUNR:
Kenny has been all over this one and ASTS lately. If you’re into the junky stuff, you need to check out what he’s doing.
So, it’s clearly earnings week for these guys. This one reported today. Unlike ASTS, I guess it was a beat. But, there’s literally nothing there. $58M in sales. Ignore it.
It has a 31% short interest. Pay attention to that.
The reaction was nasty. But, one could argue they pulled the gains forward and sold the news.
LUNR rallied about 50% in just over a week leading up to the report. And it’s flirting with a major base breakout.
I started scaling in today. I’m using 10 as my risk level. This is also the base breakout level the way I see it.
And I’m using the YTD highs around 13 for confirmation. I’ll finish my position on a close above there. The stock tried today but gravity pulled it back to the breakout zone.
So that's it, this is my space playbook for now.
The bottom line is it’s a bull market and we should prepare for lift off.
