We had some large developments in the last week regarding the US-Iran war. So far everything is going smooth as the markets continue to rally to new highs. Let’s get straight to the main talking points for the current stance of negotiations.
The framework currently under discussion is essentially a 60-day extension of the ceasefire, which is designed to act as a bridge to broader negotiations. This includes:
The Strait of Hormuz: Iran would reopen the strait and return shipping traffic to pre-war conditions within 30 days, in exchange for the US ending its naval blockade.
Nuclear Concessions: Iran would agree in principle to dispose of its stockpile of highly enriched uranium, though the specific mechanisms for this would be negotiated during the 60-day truce.
Sanctions Relief: The US would unfreeze certain Iranian assets held in foreign banks and offer limited sanctions relief.
Regional Ceasefire: A commitment to end military operations on all fronts.
Despite the progress, the negotiations are facing friction on a few key fronts:
There is disagreement over timing. Iran wants immediate relief from military and economic pressure before fully committing to nuclear concessions, while the US wants guarantees up front.
Control of the Strait: While the strait would reopen, Iranian hardliners are insisting that the waterway remain under Iranian management, which complicates the US's demands for a totally open path.
Iran insists that the ceasefire must end fighting on all fronts, specifically including Lebanon. However, Israeli Prime Minister Benjamin Netanyahu has publicly reaffirmed Israel's right to continue defending itself against Hezbollah in Lebanon.
Whether you follow along in the recent developments or simply just pay attention to markets, price is the only guidance truly needed. As I repeat, the only factor that will matter is the actual price as it reflects buyer/ seller participation.
Before diving into my thoughts for this week, let’s cover some of the stocks performance in recent weeks.
CRWD
This has has gone completely vertical making way up to the 700 milestone. We sent this stock out when the Positive EMA stack was confirmed in the 520s which has brought a 28% rally in two weeks. Contracts are already up 100% with over 200 days until expiration remaining. Here’s what was sent to subscribers:
QCOM
After sending this out, price dropped sharply toward the 10-Week EMA. Not only did this allow a dip buying opportunity for better contract prices, the ones we bought near the highs are still ITM. We got the stock at 219 which is currently trading at 238. The 230 strike Calls were given at 33 and are currently at 51, up 54%. The stock is up 10% in two weeks since posting. Here’s what was sent in the letter:
PM
Another strong stock seeing explosive strength through ATH. This one seems to be flying under the radar as most of the focus is condensed with AI/ Semiconductors. Robust chart pointing to a power trend for the remainder of the year that can send this stock above 250. Another position where the contracts are up nearly 100%. We gave the 175 strike Calls at 14 which are trading above 24 for over 70%. Here’s what was sent two weeks ago:
Before moving into the overall market structure for the week, let’s look at a prime example of a stock bouncing off support. When a stock is currently in an uptrend (10-Week above 21-Week EMA and weekly closing price above both averages) we can use the two averages as a key support. Stronger stocks tend to remain above the 10-Week which offer phenomenal prices to add or get long. ASX is a stock that shows a crystal clear example of this.
ASX
Price saw a sharp sell right back down to the 10-Week EMA which typically would spook many. This was a -16% sell from the highs in the span of a week. While this looked to be quite negative, the 10-Week EMA held this stock up. If you bought this stock at support then you would of seen at 16% gain in a week. Using option contracts this return would be amplified. Remember the same applies to the 21-Week EMA which is an even stronger support but the more ideal move is to bounce off the 10-Week. Any of the stocks posted in the letter you need to pay close attention to these weekly prices. This method will be used on the following stocks which are currently on the watchlist for this exact setup:
Once these stocks head to support, they will be flagged as potential dip buy opportunities. They will look like this:
Time to shift our focus into the setups for this week. We will begin by focusing on index strength.
