The TML Talk | May 25th, 2025

Market Overview

• Indexes and General Market Trend:
  • The NASDAQ continued to lead last week, clearing short-term resistance and now trading firmly above rising 10-, 21-, and 50-day moving averages. Volume picked up mid-week, and the index held gains into Friday, suggesting follow-through from earlier setups is starting to gain traction.
  • The S&P 500 reclaimed its 200-day simple moving average and is now testing the top of a prior gap zone. While volume remains moderate, the index is consolidating constructively with layered support beneath price. Short-term MAs are converging with upward slope, indicating early-stage strength.
  • Small caps via the Russell 2000 continue to improve off the lows but remain below key long-term averages. The Dow underperformed again, stuck below its 200-day and failing to confirm broader momentum. Leadership continues to concentrate in growth-centric sectors, with software, education, and select industrials showing aligned technical structure.
• Current Market Status:
  • A confirmed rally remains in place as institutional rotation deepens into growth-centric themes tied to AI infrastructure, cybersecurity, quantum innovation, and power generation. Leadership stocks across software, education, and digital payments are holding near highs, with many names continuing to show constructive behavior above key moving averages.
  • Thematic conviction continues to grow in energy and utility-related names, particularly those linked to increased electricity demand and nuclear innovation. Several of these are now emerging as consistent performers within the broader growth landscape, reflecting institutional interest in long-term macro tailwinds.
  • Despite minor distribution during the week, internal strength remains evident. Pullbacks have been shallow, volume has remained supportive on up days, and group rotation is expanding. Traders should stay focused on themes showing broad participation, technical health, and strengthening relative performance.

Key Lessons & Quotes

• “We’re sitting here talking about the same stocks—quantum, nuclear, energy utilities—and it’s not because we’re excited about hype. It’s because the setups are clean, the volume is real, and the demand for electricity to power AI is a macro theme that’s not going away. When you’ve got ten stocks across different sub-industries all breaking out together with alignment, that’s when you stop treating it like noise and start treating it like a rotation.”
• “Everyone watches the indexes—how many distribution days, what the Russell’s doing, whether we’re at the 200-day. That’s all fine. But I’m not going to make a single decision based on an index level if the leadership stocks are holding their 10-day. That’s the only thing I care about. If the best stocks are holding and offering add points, the market’s healthy. Everything else is just background music.”
• “I always tell people, if you’re sitting there trying to predict which stock is going to be the next Tesla, you’re already thinking backwards. Most of the best trades start off as performance enhancers—something you buy on a tight flag, ride for a few days or weeks. And then, if it earns its way into your portfolio, it becomes a core position. But you’ve got to let the stock prove that. You don’t force it.”
• “I’ve made the mistake too many times of cutting in front of my stops. I get nervous, think I’m being smart, and I end up watching the stock reverse higher the next day without me. If I’d just walked around the block instead of staring at the screen, I’d be better off. The only way I win consistently is by sticking to the exact plan I laid out before the trade. Not during it.”

Actionable Takeaways

• Respect short-term moving averages: Use the 10- and 21-day as guideposts for adding to strength or trimming weakness—many leaders are holding these levels, and violation often signals rotation or short-term exhaustion.
• Size positions by intent: Treat performance enhancers with reduced sizing and quicker exits, while core positions should offer broader risk/reward with structure that allows for adding as bases extend or tighten.
• Watch for group rotation: Confirm setups through coordinated action in related names—utilities, nuclear, education, and cyber groups are seeing tight alignment in relative strength and breakout structure across multiple stocks.
• Avoid low-volume breakouts: Breakouts without volume tend to fail quickly—look for conviction through above-average volume relative to prior sessions, ideally paired with RS line movement or follow-on group action.
• Tighten stops in volatile names: Stocks with wide ranges and low float should be given minimal room to fail—use prior day lows or 10-day breaks to limit exposure and recycle capital into tighter setups.
• Favor relative strength leaders: Prioritize names that continue to outperform indexes and peers during pullbacks—leaders often act as magnets for rotation capital when secondary setups digest or fail.
• Monitor nuclear and quantum themes: These groups continue to show leadership as macro demand for power scales—watch for high-conviction follow-through in second-wave entries or base-on-base formations.

Stock Mentions and Commentary

Communication Services – Broadcasting, Streaming & Internet:

• $LZMH: Illiquid early-stage name with IPO-style base. Chart resembles early CRWV, but liquidity remains too thin for most accounts. Needs confirmation and news catalyst.
• $NFLX: High-quality leader holding 10-day support post-breakout. RS line remains elevated. Ideal hold or add near major moving averages on volume-supported weakness.
• $RBLX: Model RSNHBP example. Tight action, never lost the 10-day. Core position trade for many accounts. Still viable for adds on dips to short-term support.
• $RDDT: Early-stage structure with rising lows and RS. Still under resistance; watch for breakout with confirmation.
• $SPOT: Volume-backed earnings rebound. Tight range forming above short-term MAs. Buyable on breakout with confirmation.

Consumer Discretionary – Automobiles & Education:

• $DUOL: High-tight flag forming after near-double. RS line at highs. Buyable on breakout if volume aligns.
• $LOPE: Weekly base forming under prior highs. RS improving. Secondary entry likely available if group rotation persists.
• $LRN: Tight three-week range. In line with education group trend. Watch for volume confirmation.
• $ODD: Breakout IPO in AI-based cosmetic retail. Volume spiked at highs. Watch for flag to tighten before next leg.
• $RIVN: Still under prior resistance. Lags peers. Character needs to improve significantly to warrant entry.
• $TSLA: Bull flag forming above rising MAs. Watch for breakout confirmation. Addable on strength or retest of trend support.
• $UBER: Base-on-base formation resolving higher. Low-volume pullbacks offer ideal entries. Still early in potential long-term move.
• $ZK: Tighter than peers. Holding structure under highs. Needs breakout volume; otherwise, remains on watch.

Consumer Staples – Specialty Retail:

• $CHEF: Quiet RS standout. Holding post-breakout gains. Buyable on support retests. Potential sleeper name within the group.
• $WMT: Tight flag near highs. Bellwether acting well. Watch for continuation with volume. Defensive long if rotation broadens.

Energy – Utilities & Nuclear:

• $BE: Reclaimed key MAs with volume. RS rising after long downtrend. Buyable on follow-through.
• $CEG: Near highs, flagging constructively. Watch for volume through pivot. Part of broader energy infrastructure theme.
• $GEV: Tight flag under highs. Holding short-term MAs. RS firming. Viable on continuation with confirmation.
• $NRG: Bull flag near highs. Holding rising MAs. Buyable if group continues to act well.
• $OKLO: Recent IPO with breakout volume. Extended short term. Flag development would offer high-probability entry.
• $SMR: Monster volume breakout. Pullback or flag setup likely ahead. Watch for consolidation before next move.
• $VST: One of the stronger utilities. Holding tight pattern post-breakout. Entry possible on continuation or support bounce.

Financials – Capital Markets, FinTech & Insurance:

• $COIN: Massive volume off post-hack recovery. RS firm. Viable on support test or breakout with volume.
• $HOOD: Tight handle just under highs. Buyable on breakout with clear stop.
• $TOST: Light-volume pullback after earnings. Tight flag forming. Buyable on breakout with confirmati

Health Care – Biotech & Pharmaceuticals:

• $BPMC: Wide and loose. Group confirmation only. No clear structure for entry. Watch for signal in broader biotech.
• $ECGP: Handle forming after strong earnings. Volume has dried up. Could trigger entry above recent range.
• $EXEL: Tight coil after earnings. Solid fundamentals. Buyable on strength or reclaim of support.

Industrials:

• $RKLB: High-beta setup coiling tightly. Watch for breakout with volume. Addable near support with clear stop.
• $TGLS: Confirmed high-tight flag. Pullback orderly. Buyable on breakout continuation with volume confirmation.

Information Technology – Cyber Security, Quantum, & Software:

• $APP: Tight post-earnings range. Buyable on breakout with RS and volume confirmation.
• $AVGO: Semi leader forming tight pattern. Low-volatility setup. Strong RS trend intact.
• $CLS: Holding post-breakout levels. RS stable. Buyable above prior resistance if volume returns.
• $CRWD: Holding trend ahead of earnings. Watch for post-report follow-through or support retest.
• $CYBR: RS breakout with volume. Group leader. Buyable on continuation through recent highs.
• $FTNT: Tight consolidation post-earnings. Watch for breakout on volume.
• $FROG: Coiling under resistance. Buyable on high-volume breakout.
• $IONQ: Leading quantum stock. Extended for now. Second entry may emerge after consolidation.
• $MSTR: Bitcoin-correlated stock with high beta. Moves in tandem with crypto ETFs.
• $NTNX: Rebounding software name with improving structure. Watch for confirmation volume.
• $PLTR: Multi-week range under highs. Buyable on breakout with volume support.
• $QBTS: Explosive early move. Extended. Watch for flag to reset risk/reward.
• $QUBT: Still a laggard but showing RS improvement. Could emerge with group strength.
• $RGTI: Among most actionable quantum names. Volatile but tightly coiled. Setup developing.
• $SNOW: Gapped up through resistance on earnings. Structure supportive for continuation.
• $TTAN: High-potential but currently untradable. Watching for tightening pattern to emerge.

Thematic ETFs – Bitcoin, Gold, Nuclear, & Quantum:

• $IBIT: Tracks Bitcoin directly. Consolidating constructively with broader crypto market. Watch for alignment with BTC strength and ETF volume confirmation.
• $GLD: Benchmark for gold exposure. RS trend improving. Watching for breakout strength.
• $QTUM: Quantum computing ETF. Thin volume but closely tracks the trend across high-beta quantum names. Best used to gauge sector alignment.
• $NUKZ: Nuclear-focused ETF capturing broader theme. Watch for alignment with individual leaders as utility rotation continues.

Ross’ Watchlist

• Communication Services: LZMH NFLX RBLX SPOT
• Consumer Discretionary: DUOL EBAY EPSM GRPN LOPE LRN TSLA
• Consumer Staples: AMZN CHEF ODD WMT
• Financials: COIN HOOD TOST
• Health Care: BPMC EXEL HIMS
• Industrials: ECG LYFT NNE PSIX RKLB SMR UBER
• Information Technology: APP AVGO CLS CRWD FROG FTNT GRND IONQ LIF NET NOW NVDA PLTR QUBT RGTI SNOW TSSI TTAN TWLO
• Materials: AEM TGLS
• Thematic ETFs: GLD IBIT NUKZ QTUM
• Utilities: CEG GEV NRG OKLO VST