How To Trade War Stocks

Every seasoned trader is saying the same thing right now:

“The best setups feed on this volatility.”

We’ve already seen:

• A small tech stock spiked 95% after announcing a purchase order from a military force in the Middle East.

• Another small stock spiked 165% with news that an Israeli defense contractor needed its technology for drone defense.

• And a third stock spiked 682% after announcing a purchase order for U.S. Navy Tomahawk cruise missile components.

And that’s just the tip of the iceberg…

It doesn’t take into account the entire oil sector that’s completely upended by the violence in the Middle East.

See the headline below:

Source: Reuters

Opportunities are everywhere in this market.

But it can overwhelm anyone who doesn’t read the news or check the market regularly.

I get the same questions every time from my students:

“What do I trade? Am I too late? Can these stocks go higher? When do I get out?”

If you missed the earlier moves, pay attention.

The next setup is already forming.

The Violence Continues

The war in Iran isn’t slowing down yet (and the ripple effect is directly impacting markets).

• Iran named Mojtaba Khamenei the new supreme leader. He’s the son of the former leader, killed by strikes on February 28, and Trump already expressed his disapproval.

• WTI crude oil prices spiked above $110 per barrel on March 8.

• U.S. gasoline prices are up 17% since the beginning of the war.

The photos and videos coming out of the Middle East show terrifying scenes of destruction.

Every day brings new headlines.

And every headline moves the market.

That’s the environment we’re trading in right now. Yes, it’s scary. And I wish the violence would end today… But there’s only so much I can do.

Instead of feeling sorry for myself and the rest of humanity, I’m being proactive.

I donate all my trading profits to charity. And these global catalysts create some of the best trade opportunities we’ve seen in years.

Wartime Momentum in the Market

There are three recent examples that traders should keep on their watchlist as tensions continue in the Middle East.

On all of these setups, there’s one strategy that keeps my account in the green…

Ignore this one detail, and you’ll be putting yourself at risk of missing the momentum (or taking unnecessary losses).

You know, past performance doesn’t indicate future results, but the pattern is important.

Pay attention.

No. 1: Silynxcom Ltd. (SYNX) — Tactical Military Headsets

On Friday, March 6, SYNX announced a purchase order exceeding $620,000 from a military force in the Middle East for tactical communication headset systems.

Silynxcom is an Israeli company. Its headsets are built for active combat, and a longtime military customer just placed a major order.

The stock spiked 95% on Friday following the news.

It’s trading lower this week, but the price could reverse at any moment. Past spikers can spike again.

Source: StocksToTrade

SYNX chart multiday, 1-minute candles.

No. 2: Peraso Inc. (PRSO) — Drone IFF Technology

On March 6, 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.

In plain English: As battlefields fill up with drones, armies need technology that instantly tells them whether a drone is friendly or hostile.

Peraso’s chips are now at the center of that solution in an active war zone.

PRSO spiked 165% on the news.

I bought 3,000 shares at $1.74 that Friday afternoon. The stock was holding a big spike, and the drone narrative fit perfectly with the ongoing conflict. I expected another spike into Monday.

I was right.

That same day near the close, I sold 2,000 shares at $2.01 (my first target). Then, I sold the remaining 1,000 at $1.90 on Monday morning.

Final result: solid Weekend Trader gains on both exits.

The Friday sell near $2 was the right call. Monday’s open was weaker than I hoped, but I still got out with gains.

The chart shows consolidation after touching $2.50 during premarket on March 9. That’s a hint that the price could push higher.

Source: StocksToTrade

PRSO chart multiday, 1-minute candles.

No. 3: Mobix Labs (MOBX) — Tomahawk Missile Components

On March 3, Mobix Labs announced the receipt of a significant purchase order for components used in the U.S. Navy’s Tomahawk cruise missile program.

The company sells a high-reliability component that keeps onboard electronics stable under extreme conditions while inside an active U.S. strike weapon.

MOBX spiked 682%.

And prices bounced off $0.60 per share on March 4 and 5… keep an eye on the $1.60 breakout level from the premarket highs on March 4.

Source: StocksToTrade

MOBX chart multiday, 1-minute candles.

How To Trade This Volatility

Three different stocks…

Three different catalysts…

Three monster spikes.

But there’s one detail that separates the traders who made money from the traders who blew it:

The ones who walked away green took their gains into strength.

Take my PRSO trade for example. I sold 2,000 shares at $2.01 on Friday afternoon just to lock in profits. That was 20 minutes after I entered the trade.

By Monday morning, the stock was fading off a premarket high of $2.50.

If I had held everything into Monday, hoping for more, I would’ve left most of my gains on the table.

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