Weekly Trading Plan | May 25th
Three different ideas for a power-trending market.
Welcome back to the Weekly Trading Plan. Happy Memorial Day to everyone reading this.
This week we are doing things a little differently. Three names get the full breakdown with charts and levels. The rest of the portfolio gets targeted notes below the paywall.
This is what we are covering this week.
Market Pulse. A read on where we are in the current confirmed uptrend and what a pivotal moment in the tape means for how aggressive to be on new buys.
Three Lead Ideas. One AI semi, one software name, one crypto-adjacent play. Full charts, full levels, full reasoning on each. Free for everyone this week.
The Rest of the Portfolio. Five more names with current positioning, key levels, and what we are watching. Current holdings are tagged.
Quick reminder before we get into it. Nothing in here is financial advice. This is one trader’s read on the tape and the names worth watching. Do your own research, manage your own risk, and never trade money you cannot afford to lose.
Let’s get into it.
Market Pulse
We are at a pivotal moment. The follow-through day in April established the current uptrend and the tape has been rewarding disciplined buyers ever since. The trend is intact but we are not in a “buy everything” environment. This is a stock picker’s market right now and the divergence between what is working and what is not is wide.
The leading AI names have been the engine of this run. The down days we have seen so far have not been distribution days. They have been rotation days, with money moving from AI semis into transportation, energy, and software. That rotation tells us risk appetite is still healthy, just moving around.
What we are watching this week: whether the leading names continue to build constructive bases above their 10-day moving averages or start to crack them. A cluster of 10-day violations across the leaders would be the first sign to tighten up. Until then, we stay engaged and keep sizing into quality setups.
Position sizing this week: normal for breakouts from tight flags with defined stops. Light for early entries ahead of the pivot. Patience is the edge right now, not urgency.
The Focus List
$MXL, MaxLinear [HOLDING, NEW]
This is the AI theme idea for the next few weeks.
MXL has put together five consecutive quarters of earnings acceleration versus the same quarter a year prior. Sales growth went from negative to plus 43% in the most recent quarter. The fundamentals are backing the chart, not fighting it.
The pattern is about as clean a high tight flag as this market has produced. It has been consistently closing above the 10-day moving average since the April follow-through day. The flag is bounded between $80.25 on the low end and $104.27 at the high. It has been using upside and downside reversals within that range, and the right side of the base looks healthy.
We started buying on a pocket pivot on Wednesday May 20th when MXL broke its internal downtrend line within the flag. Friday’s shakeout forced us out, but we bought back into the upside reversal by end of day. That Friday low at $88.50 is the stop. Anything trading below $88.50 and we hold light until the base resolves.
For most readers, the clean entry is the breakout at $104.27. We will be adding as it crosses $100, treating that as a Livermore century mark, and building to full size at $104.27. Relative strength rating of 99. This is the primary idea heading into the week.
$TWLO, Twilio [WATCHING]
This is the software idea and the rotation hedge.
Twilio has always been the developer community’s API company, and that identity is getting a second act. As companies build AI infrastructure and connect telephony components to it, Twilio is the vendor sitting in the critical path. Voice AI integration gives the fundamental story a new angle.
The chart is where the risk is defined. Twilio was building a high tight flag and found resistance at $200. It pulled back and reversed off the 21-day exponential moving average, which is currently sitting around $180. That is the line in the sand.
We like this setup because the downside is clear and the asymmetry is there. The plan is to start building a position here, add through $190 on a cross, and go to full size on a cross of $200 into new highs. The stop is $180, period. If it loses the 21-day, we are out.
Relative strength at 93. Good earnings and sales growth. Software has been lagging the AI names but on the rotation days, it has been the beneficiary. This is how we stay in the market during AI down days without going to cash.
$CRCL, Circle Internet Group [HOLDING]
This is the crypto-adjacent idea and the slow play.
Circle is not a fundamental story in the traditional sense. Earnings and sales are not yet at the levels we usually require. We built conviction here the hard way, by going deep on the business. Circle is the stablecoin infrastructure company that has done the regulatory homework no one else has done yet. As AI agents become a real part of daily commerce, stablecoins are the payment rail between them. Circle is the only entity positioned to clear that transaction at scale right now.
The chart has done its part. A cup formed from mid-March to early May. A short handle tried to break out and failed, but it never undercut the breakout day low at $105.36. That $105 level is real support. The 50-day moving average is above the 200-day and both are relatively flat, which is constructive.
We own it here. The last three weeks have been exceptionally tight, trading within 1.5% on weekly closes with volume completely dried up. That is a Bill O’Neil tightness signal. We are adding on a cross of $120. The next significant level is $130, which would be a full breakout of the cup. The stop is the 50-day, with $105 as the emergency exit.
This one moves on its own clock. It is not going to run with the AI heat. But if that setup resolves, we will be sized and ready.
