Who doesn’t love a good market leader?
They’re the first to get moving. They deliver the biggest gains. And they often hold up best during pullbacks.
Simply put, they’re the best stocks money can buy… especially if you buy them early.
That’s harder than it sounds.
It’s much easier to identify them after they’ve surged 50%... 100%... or even 150% in a matter of months.
By then, the big money has been made.
So, how exactly can you “front run” the masses?
There are a few ways. But one of the best things you can do is look for relative strength.
I’m not talking about the relative strength indicator, also known as RSI. I’m referring to stocks that are outperforming the broader market or their industry group.
That’s how I got my RiskHedge Live subscribers into Credo Technology Group Holding (CRDO) and Astera Labs (ALAB)—today’s two strongest semi stocks.
Yesterday, CRDO surged 48% to new all-time highs after crushing earnings. We’re now up 91% on CRDO since our initial buy in late August.
ALAB has also been crushing it. Yesterday, it surged nearly 13%, closing at new all-time highs. We’re now up 30% on this trade in under a month.
Keep in mind that semis as a group haven’t done jack lately. The VanEck Semiconductor ETF (SMH) hasn’t set a new high since July. It’s currently trading 12% off that level.
In other words, CRDO and ALAB are massively outperforming their peers. They’re in a prime position to lead semis higher in the coming months… now that the group is starting to show signs of life.
Of course, you’re probably wondering how we knew to buy CRDO and ALAB over the other semi names. And it’s quite simple.
CRDO and ALAB were both displaying extreme relative strength.
CRDO, in particular, never broke its strong uptrend during the semi correction. It was trading just below its all-time highs while many of its peers are still trading 30% off their highs.
ALAB’s strength has also jumped off the screen. It’s been in a powerful uptrend since September, and it’s coming off one of the best earnings reactions of the entire earnings season.
That’s the key…
If you’re trying to play the next hot rotation in the market, focus on the strongest names… the ones holding up the best. That’s where you’ll find industry and market leaders like CRDO and ALAB.
Right now, my RiskHedge Live portfolio has 20 buys. We’re up on 19 of them, and I’ll continue to add to our strongest positions. If you’d like to join us, go here. RiskHedge Live isn’t an “advisory”... it’s my private interactive trading room where you can act on my best trade ideas in real time while being part of a great community.
Justin Spittler
Chief Trader, RiskHedge
