April’s action may not have quite gotten to the point of a full-blown crash, but it was pretty close. Both the Nasdaq and the Russell 2000 entered bear market territory, and the S&P 500 got there on an intra-day basis before barely escaping.
On top of that, a lot of former high-flyers dropped even further, with any number of growth stocks practically imploding.
It wasn’t great.
But there’s a silver lining to all of it.
When stocks are blowing up left and right, it’s a lot easier to find the stocks that still look good. And that makes my job easier.
The holy grail for my trading system is finding stocks that are outperforming the market and their peers and that also attract bullish option activity.
When stocks are cratering, the outperforming names stand out like a sore thumb.
And now that the market has bounced back, those outperforming stocks are all getting a spot on my watch list.
Let’s dive in …
Uber (UBER) has held up spectacularly despite the market meltdown as the stock is just a couple dollars below its 2025 high. That kind of outperformance stands out in a BIG way. And with this stock outperformance has been steady call buying, including these trades from late April:
Buyer of 6,000 Uber (UBER) June 80/100 Bull Call Spread and Sale of June 60 Puts – Stock at 75 (bull risk/reversal)
Buyer of 3,000 Uber (UBER) November 95 Calls for $3.55 – Stock at 75
Buyer of 4,000 Uber (UBER) June 82.5 Calls for $2.40 – Stock at 74
These three trades above are a small sample of the very strong option activity in UBER, and because of this option action and stock strength, UBER is at the top of my watchlist for new buys.
GE Aerospace (GE) doesn’t look as good as UBER, but it also hasn’t died like many of its industrial peers. And following an earnings beat and a subsequent big move higher in the stock, GE is now trading at its 2025 highs. And also of interest to me, in late April a trader bought these GE calls looking for continued strength:
Buyer of 3,000 GE Aerospace (GE) June 200 Calls for $7.60 – Stock at 194
GE is a classic bull market stock, and much like UBER above, with the bulls back in control, I could see GE working well.
And finally, while the option activity has been very mixed in Palantir (PLTR), the stock strength has stood out like a sore thumb of late and I could see former glamour leader PLTR regain its leadership status amongst growth stocks.
Stepping back to the market, I’m encouraged by the market’s action lately, and hopefully, this most recent rally is the start of a sustained move higher. And if that is the case, it won’t be hard to find the next emerging stock leaders.
