Don’t miss what’s occurring with drone makers… the ability of the parabola… 9 commerce concepts from Jonathan Rose… enormous one-year returns… why Louis Navellier is becoming a member of Keith Kaplan subsequent Tuesday
Drone maker shares are surging.
Take Kratos Protection & Safety Options (KTOS). It’s up 40% over the past month, and 80% over the past six months.
Drones are being used extensively in the Russia-Ukraine war by both sides. They’re playing a significant role in surveillance, targeting, and even conducting strikes. Meanwhile, both Israel and Iran launched large-scale drone attacks in their recent conflict.
Stepping back, the world is growing more unstable, defense spending is growing, and much of it is flowing toward drones.
Here’s The Washington Times from this afternoon:
Defense Secretary Pete Hegseth is fully on board. He announced a major drone initiative earlier this month, declaring that “drones are the biggest battlefield innovation in a generation.”
Meanwhile, in June, NATO members agreed to spend 5% of their respective GDPs on defense and security by 2035. And much of this spending will go directly to drone technology.
Here’s The New York Times with one example:
The British Defense Ministry announced this month a startling overhaul of its warfighting approach, moving away from the Cold War-era focus on heavy armor and mechanized infantry.
Under the plan, 80 percent of combat capability will rely on remote-controlled, reusable ground vehicles and drones as well as missiles, shells and self-destructing drones.
Now, in a moment, I’ll tell you how to get a list of nine potential drone trades (for free). But first, let’s look at how gains in drone stocks are starting to mean major returns.
The power of getting in early
Luke Lango has held KTOS in his Breakout Trader portfolio since May of 2023.
For newer Digest readers, Breakout Trader is a momentum buying and selling service that focuses on buying and selling shares solely in Stage 2, which represents the upswing of a buying and selling cycle (earlier than Stage 3 – a topping sample, adopted by Stage 4 – a decline, after which Stage 1 – a basing sample).
In Tuesday’s concern, Luke highlighted a key precept of momentum buying and selling – how returns can speed up quickly as positive factors start to compound:
Final week, KTOS surged one other 16%, taking our whole commerce return (on this open place) to 250% (formally 249.79% at yesterday’s shut). An enormous “congratulations” to you…
That is when positive factors can actually snowball.
Living proof, simply three weeks in the past, in our June 24th concern, our KTOS return was 202.51%.
Since then, KTOS has jumped 19%, however that has translated into our general commerce return climbing nearly 50% to the 250% determine I simply highlighted.
Let me replace this…
Within the three days since Luke’s replace, KTOS has climbed one other 15.8% (as of Friday morning as I write); in the meantime, the official Breakout Dealer return has jumped from 250% to 301%.
This type of compounding impact is what provides massive winners their parabolic form on inventory charts.
Luke concluded his KTOS evaluation with, “Welcome to 250% – however don’t get snug. If this tempo holds, we’ll be at 300%+ earlier than the top of the month.”
It seems “by the top of the week” was extra correct.
One other drone maker that might be within the early phases of its personal parabolic transfer
Palladyne AI (PDYN) develops autonomous drone software program that enhances the capabilities of present drone platforms for navy and protection functions.
It’s additionally within the Breakout Dealer portfolio and has surged 48% since final Thursday.
Yesterday, Luke advised subscribers lock in roughly 60% returns on a portion of their commerce:
PDYN inventory surged sharply in the present day regardless of no materials information, propelling our place up roughly 60%. However momentum alone doesn’t maintain valuations. The inventory’s Relative Power Index (RSI) now indicators that it’s overbought…
Locking in partial income on PDYN at present ranges is a disciplined technique to profit from short-term momentum whereas preserving upside potential over the following a number of quarters.
To verify we’re all on the identical web page, when an RSI chart climbs above “70,” that indicators an “overbought” transfer. This implies the inventory’s value has doubtless risen too rapidly and could also be due for a pullback or correction.
Given this, if you wish to provoke a commerce on PDYN, wait till its RSI pulls again, consolidates, then begins a brand new climb – which seems is going on as I write (the inventory is down about 3%).
Circling again to KTOS, based mostly by itself elevated RSI, our advice is identical. As I write, KTOS’s RSI clocks in at 81. Translation – pink scorching.
So, the protected play is to observe these trades from the sidelines till they regroup, and their technical ranges normalize.
However if you wish to play drones, these are two of the most well liked shares on the market.
Need much more drone commerce concepts? Veteran dealer Jonathan Rose has you coated
In the Tuesday 7/8 episode of Masters in Trading Live, Jonathan delved into the “Drone Revolution,” detailing 9 completely different drone corporations.
In the event you’re contemplating drones in the present day, it’s a must-watch since Jonthan supplies all types of useful, actionable data. Better of all, it’s free!
And as a reminder, you’ll be able to be part of Jonathan for his free Masters in Trading Live broadcasts at 11:00 a.m. Japanese time each day the market is open. They’re a incredible technique to study extra about buying and selling, whereas additionally supplying you with the instruments to place a wad of money in your pocket.
Talking of a wad of money…
Although the main indexes are at all-time highs, we’re largely flat right here in July.
Nonetheless, below the floor, loads of particular person shares are exploding greater – a continuation of their multi-month surges.
I’m on a gaggle e-mail chain with a number of InvestorPlace analysts and researchers. In current days, I’ve seen a flurry of emails come via highlighting some huge winners. The shares beneath embrace a couple of from the e-mail chain.
Since we started in the present day’s Digest highlighting Luke’s win with KTOS, I’ll profile a couple of different Luke picks from his numerous portfolios:
- Nuscale Energy Corp. (SMR): 278% one-year return
- AST SpaceMobile (AST): 353% one-year return
- Palantir (PLTR): 433% one-year return
- Rocket Lab (RKLB): 840% one-year return
Extra not too long ago, take a look at Coinbase (COIN), which Luke holds in his Innovation Investor portfolio.
From its Liberation Day low, COIN has surged 186%.
Backside line: This market has no scarcity of wealth-building shares. We hope you’re having fun with them in your individual portfolio.
If not, right here’s one thing to contemplate…
The facility of mixing elementary and seasonal power
This week within the Digest, we’ve profiled the seasonality buying and selling instrument from our company companion, TradeSmith. It identifies the precise days to purchase and promote a inventory based mostly on its distinctive, historic patterns.
Right here’s TradeSmith’s CEO Keith Kaplan with a short overview:
It runs 50,000 checks a day to investigate each inventory within the main indexes and nil in on those with the strongest seasonality traits…
Some shares commerce so constantly—rising or falling throughout particular home windows, 12 months after 12 months—you could map out a 12 months’s price of nice trades.
Subsequent Tuesday at 10 a.m. Japanese, Keith is holding a webinar the place he’ll stroll via the seasonality instrument, and present attendees one of the best ways to make use of it.
We’ve famous that when you sign up to attend the webinar, you’ll get entry to the seasonality instrument instantly so as to take a look at drive it for yourself.
In yesterday’s Digest, I discussed that legendary investor Louis Navellier will be part of Keith subsequent Tuesday
Louis is among the most revered “quant” traders in our business – and his been for many years.
Right here’s Louis explaining why he’s becoming a member of Keith on Tuesday:
Over time, my data-driven strategy has pinpointed 18 suggestions that returned 10,000%… and 675 others that doubled.
My system has made lots of people some huge cash. And it’s stood the take a look at of time.
However whereas working with fintech firm TradeSmith, I got here throughout one thing that sharpens it even additional.
Suppose my greatest picks—on steroids.
We profiled this in yesterday’s Digest – the mix of Louis’ fundamentals-focused inventory choice technique and Keith’s seasonal/technical technique.
Again to Louis:
My Inventory Grader system ranks shares based mostly on their development potential.
However my system lights up a whole bunch of shares a 12 months as potential buys. How do I do know which have the best revenue potential?
That’s the place this new system is available in.
Sure shares have a historical past of going up on particular calendar dates—12 months after 12 months. By shopping for on seasonally favorable “Inexperienced Days,” you improve the percentages of success while you’re shopping for socks.
We’re working lengthy in the present day, so I’ll wind us down. However subsequent Tuesday, Louis and Keith will dive into far larger particulars about their respective quantitative methods, “inexperienced days,” and what these two specialists see coming for the market.
On that be aware, I’ll add that Keith’s seasonality instrument suggests we’re within the ultimate stretch of a bullish time of 12 months (serving to drive these positive factors I profiled above). However we’re about to run into seasonal headwinds, so inventory choice and timing turns into much more vital.
To get a way for what that might imply for the particular shares in your portfolio, click here now to register for next Tuesday’s event, then plug your holdings into the seasonality instrument.
In any case, we’re in a scorching market. Let’s capitalize whereas we are able to.
Have night,
Jeff Remsburg
