Market Milestones
RLT Newsletter 4.30.26
Thursday capped off an incredibly bullish month. The theme was simple: strong names got stronger, weak names went nowhere.
Since the trend-changing gap on April 8th, we’ve seen near-vertical moves across the market. This now goes down as one of the best Aprils on record for SPY, second only to April 2020.
Volume came in strong on Thursday, driven largely by big tech earnings. That gives us a clear level to trade against. A break below Thursday’s candle would likely kick off a pullback, potentially back toward prior all-time highs and the 20 EMA.
It’s worth nothing that the SPY still hasn’t touched the 10 EMA during this entire move. That one fact shows just how extended and aggressive this trend has been. Because of that, I’ve been using the 8 EMA as my guide for entries on some of the most extended and strong names.
SPY Daily Chart
SOXX: Long Before the Short
SOXX and SMH both look poised to push toward that new high I am wanting. The past two sessions offered excellent opportunities for aggressive long entries, setting up what I still expect to be a final push higher in this move.
SOXX Daily Chart
AVGO is a great example of how stretched names are behaving in this environment. After running 50% in just 18 days, it pulled back roughly 8%, printed an indecision candle followed by a hammer, and then broke out on Thursday. That same pattern showed up across multiple names. I traded variations of it in MRVL, AEHR, TSM, ARM, APLD, and COHR, among others.
In trends this strong, longer-term moving averages become far less useful. For this kind of momentum-driven environment, short-term EMAs are a much cleaner tool. The first pullback into the 8, 9, or 10 EMA tends to get bought quickly after a move like this.
Names that become extended off the 10 EMA typically pull back, find support at that short-term average, and then push to new highs. Only after that do we usually see a more meaningful correction. The key question now is how much further this move can extend before that larger pullback into bigger moving averages arrives.
TSM Daily Chart
Trillion Dollar Titans Update
AAPL delivered strong earnings Thursday night and is gapping up slightly. That removed one of the risks that the broad market was facing this week.
AMZN needs to hold Thursday’s low. A strong close below that level opens the door for a deeper retrace into lower gap fills, and start to call into question the 2020 analog.
GOOGL remains one of the strongest charts out there. $400 is within reach, but Thursday’s low is the line in the sand. If that breaks, I want to see $340 hold. Below that, this starts to look like an exhaustion gap regardless of the powerful fundamentals.
TSM and AVGO should push to new highs next before taking out Wednesday’s pivot. If the pivot breaks first, I will stop out and wait to see what unfolds.
Hot Stonks
Outside of AI and semis, rare earth stocks and a few other and hot stocks from last year are starting to show life. I know a number of you caught LAC with me and that chart still looks saucy. While many of these names are not in strong trends yet, they’re building constructive bases at key levels. When something like OKLO starts catching a bid, it signals a wild bull market, but also one that may be getting a bit frothy and nearing a top.
Nuclear is another area I’m watching closely. NLR has been consolidating in a large triangle for months and is getting close to a decision point. Thursday’s bullish gap and strong close above the 100-day SMA created a clean morning star reversal right off the point of control. If it clears overhead resistance and makes a new high, the next target is around $167. Bull thesis dies below Thursday’s low and the 200-day SMA. Key holdings in NLR are: CEG, CCJ, BWXT, UUUU, OKLO, NXE, and SMR.
NLR Daily Chart
This market is producing awesome bullish gains. It is time to protect those gains, while continuing to participate, but with enough discipline and risk management that when conditions eventually shift, we are not round-tripping those gains.
To that end, I hit multiple profit targets on Thursday, took partials, and raised stops across several positions.
Thursday’s low is the key level I’m watching. A break below it would likely signal the start of a broader pullback. I’m also keeping a close eye on SOXX for the short setup that I outlined in my From Semi to Fully Bullish newsletter.