Consolidation Day One
RLT Newsletter 4.20.26
The broad market consolidated on Monday, with SPY printing an inside candle. After the bull run we just witnessed over the last two weeks, some level of slowdown, consolidation, and retesting is to be expected. That said, momentum remains firmly in the bulls’ favor for now, and it’s likely that those who missed the move are looking for any opportunity to get involved. Because of that, dips should continue to get bought. If SPY pulls back into the $700 area, which marks the prior all-time high, that level should act as solid support where buyers step in for another attempt at new highs.
SPY Daily Chart
SMH is approaching its 161.8% extension of the March drop near $470. That level should act as a reasonable resistance target for the market leading ETF, especially if price can reach it this week. This would likely coincide with NVDA filling its gap at $205.56. From there, I would expect a pullback toward the $430 area on SMH, followed by another push higher, potentially into the $495 to $500 range. I’ll be watching these levels closely and looking for opportunities to position for the next leg up.
SMH Daily Chart
I’m also watching RSP as a potential signal for when we finally get a more meaningful consolidation and retest. Unlike DIA, it has not yet made a new all-time high, but it’s getting close. If RSP pushes into the $205 level this week, that could act as resistance and give us the consolidation and retest I’m looking for before the next move higher.
The rally we just experienced was historic in both speed and scale. Moves like that have typically occurred after major corrections, not after relatively shallow pullbacks. That’s what makes this environment more complex than usual. Given that we just saw one of the most aggressive three-week rallies on record, patience is critical here. Emotion and FOMO are not your friends in this type of market.
That doesn’t mean sitting entirely on the sidelines is the answer, especially if the bullish scenario continues to play out. It just means risk needs to be managed tightly. Focusing on trading with the trend and being very selective. Prioritizing only the highest-quality setups with strongest probabilities and cleanest risk-to-reward profiles, with a heavy emphasis on protecting downside.
Space Mobile
I messaged the RLT swing trade room about ASTS in the morning as it looked like a pretty clean trade from an R:R standpoint. It’s in the space space, which is one of the hottest places to be right now. Well… actually space is freezing. Unless you’re close to the sun, then it’s way too hot. Anyway, space stocks are cool, space stocks are hot. You get it.
ASTS gapped down into the 200-day SMA, an average it tends to respect and one it hasn’t touched since June of 2025. The gap down came off a headline that doesn’t really impact the long-term thesis, and it looks like the market figured that out pretty quickly. Buyers stepped in all day Monday and we ended up with the largest bullish volume in over a year.
Now the setup is pretty clearly defined. It should not break the low of Monday’s candle or lose the 200-day SMA anytime soon. If it does, that’s a major red flag and the bullish thesis starts to fall apart. As long as that level holds, a push into the gap fill looks highly likely as Target 1, and it could happen as soon as Tuesday afternoon.
My primary target on ASTS is the horizontal resistance at 100, with a move into new all-time highs as Target 3 if momentum really kicks in.
ASTS Daily Chart
Ondas Inc
ONDS is one I’m already long, but Monday’s candle adds an interesting layer to the R:R and further defines where I want to manage risk. Any close below the 100-day SMA would be a serious hit to the bullish thesis here.
If it pulls back and retests the 100-day, that could still offer a solid entry since this name has been chopping around quite a bit recently and I don’t expect the next move to be straight forward. There’s a bit of a double bottom forming on the daily, and we just saw a notable volume spike. Given how volatile ONDS is, a push to new highs is definitely not out of the question if given enough time.
ONDS Daily Chart
