A brand new stock just debuted in the hottest sector we’ve seen in years.
It’s an AI drone-defense play in the middle of a war in the Middle East.
And the fact that it’s an IPO makes it even more volatile.
Defense stocks were already moving:
• Silynxcom Ltd. (SYNX) spiked 95% with news of a new order for its tactical headsets.
• Peraso Inc. (PRSO) spiked 165% with updates about its drone technology.
• Gaxos.ai Inc. (GXAI) spiked 102% with news of a Navy license.
This IPO puts them all to shame…
It’s hands down the hottest stock in the market.
A Global Catalyst
The war in Iran isn’t slowing down.
Every day brings new headlines. And every headline moves the market.
There are two sectors at the center of it all:
1. Oil
2. Defense
WTI Crude oil already crossed $100 per barrel, most recently on March 15 and 16.
And U.S. gas prices are up 27% since the beginning of the war, the largest monthly increase since Hurricane Katrina.
When war breaks out in an oil-rich region, the fear of constrained supply drives prices higher.
When a third of the world’s crude oil trade is cut off due to a closure of the Strait of Hormuz…
Expect an extra level of volatility.
See my oil watchlist here.
Since the war puts pressure on oil prices, the situation is even more dire.
Everyone’s affected by the events in the Middle East: every business that relies on deliveries or shipping, and every household with a car.
Suddenly, defense stocks hold new weight…
This is about saving the global economy.
Defense Stocks
The newest IPO that’s spiking right now isn’t an isolated occurrence…
Silynxcom Ltd. (SYNX) announced a purchase order on March 6 that exceeded $620,000. It was from a military in the Middle East for tactical communication headsets.
The stock spiked 95% following the news.
Also on March 6, Peraso Inc. (PRSO) announced that its 60 GHz millimeter-wave semiconductor technology was selected by InTACT, an Israeli defense contractor, for use in a new drone Identification Friend or Foe system.
The stock spiked 165% after the news.
On March 5, Gaxos.ai Inc. (GXAI) announced that one of its main investments, America First Defense, secured a license from the Navy for a counter-UAS system designed to defeat hostile drones.
The stock spiked 102%.
Three different defense stocks, with three different catalysts, and they all turned into monster spikes.
Now there’s a fourth stock pushing higher…
And this one just hit the market.
The Newest Drone Defense IPO
The stock is Swarmer Inc. (SWMR).
Swarmer is a drone autonomy software company that’s actively supporting operations in Ukraine.
Drones are reshaping every active battlefield, from Ukraine to the Middle East. Over the last few years, the demand for autonomous drone systems has evolved into an urgent military requirement.
SWMR already spiked 420% since it started trading on March 17:
Source: StocksToTrade
SWMR chart multi-day, 1-minute candles.
And the float is just 5.4 million shares…
When stocks have a low supply of shares (below 10 million), prices spike higher as demand increases.
And because it’s an IPO, there isn’t an established trading range yet. There aren’t any bag holders selling into the spikes.
IPO price action is pure chaos as everyone tries to find a fair trading price. And that chaos creates opportunity for traders who know what to look for…
How To Trade SWMR
The volatility from SWMR is extreme right now.
That’s the nature of a low-float IPO in a hot sector.
Luckily, we can trade this volatility with popular patterns.
The most volatile stocks in the market follow the same basic patterns because people are predictable during times of high stress.
Human emotion doesn’t change. And neither do these patterns.
The setup that’s forming right now on SWMR is the same setup we saw on PRSO, SYNX, and MOBX.
It’s all about pattern recognition. This is why I constantly tell my students to study charts.
If you can learn to recognize these patterns immediately, over and over again…
You’ll have a skill that can pay you for a lifetime.
Remember: These war-catalyst spikes are massive. But the small-cap moves don’t go up forever.
Our job is to trade the most common price action from the spike, get out, and wait for the next setup to form.
Don’t let a 100%+ spike turn into a breakeven trade (or a loss) because you got greedy.
Follow my patterns and take gains into strength.
If you have any questions, email me at [email protected].
Cheers,
Tim SykesEditor, Tim Sykes Daily
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