Tuesday Top Trades
RLT Newsletter 3/3/26
The markets opened the week with a gap down, immediately testing critical support. The weakness was met with buying right out of the gate that didn’t stop for most of the day. Monday’s candle looks very similar to the February 20th candle, so I would not be surprised to see comparable price action unfold from here in the short term.
The most constructive takeaway from Monday is that support levels are becoming increasingly well defined. On many names, including SPY, QQQ, SMH, today’s low now becomes the level that must hold. If that level breaks, especially in the near term, I would expect a meaningful wave of selling. If it holds, we could see a steady grind higher, particularly in some of the more severely beaten down names.
As long as the QQQ does not open below yesterday’s low, I plan to add some bullish exposure on a retest of Monday’s candle. The stop would be a close below the low of that candle and below the anchored VWAP that has held since last June. The target for the trade is the 100- day SMA.
This is a setup that has worked before around the 100 day SMA on SPY and near the $600 level on QQQ. The risk is clearly defined because I know exactly where the bullish thesis breaks. I do not mind adding a bit of risk here in case we get a more sustained upside move.
My broader thesis remains unchanged. I still believe this key level eventually breaks, opening the door to a larger correction than anything we have seen since the April 2025 lows. That said, I could be wrong, and even if I am ultimately right, the sideways chop could persist longer than expected. In the meantime, I am going to look to trade the chop when the market presents solid opportunities.
QQQ Daily Chart
If we do break down this week, there are several compelling bearish 10 EMA setups developing. TSM and AAPL are at the top of that list. Be sure to check out the Tuesday’s Top Trades video below for a full market breakdown, along with a detailed review of some of my favorite stocks right now.
Taiwan Semiconductor Manufacturing Company (TSM)
TSM has led the semis higher since last April and has been a very difficult name to short during this bull run. If this 10 EMA setup triggers, it would be the first one since the November 5, 2025 candle, which worked well and stands out as one of the only clean short setups on the chart in hindsight. If TSM starts to roll over, I see $335 as a reasonable first target, with the 100-day SMA as Target 2. That would represent roughly a 20 percent pullback, and if that move materializes, I would expect at least a short-term bounce at the 100-day SMA
TSM Daily Chart
Astera Labs Inc (ALAB)
ALAB is behaving almost exactly the same as it was this time last year, dropping like a rock. This is already the third major drawdown in a chart that is not even two years old! Needless to say, this is a volatile name, so position sizing and risk management are critical upon entry.
Each prior crash has been followed by a strong multi month bounce to new highs, which raises the question of whether this time will be different. There is a significant confluence of support at current levels, including the 100-week SMA, the point of control, the gap fill from the July 21, 2025 breakaway gap, and the lower boundary of the broader trend channel. That is a meaningful cluster of support after a very large decline.
However, if the AI trade continues to unwind, ALAB could push even lower. The prior two drawdowns were roughly 68 percent, and the stock is only down about 57 percent this time. For that reason, I would prefer to see a flush into the $105 to $90 range for optimal risk reward on a longer term swing. If it can reach that zone before any meaningful bounce, I would look for a move back into the $130s or even $150s. That rally could then be used to collar positions and lock in gains, with the ultimate objective being a move to new all time highs.
ALAB Daily Chart
Check out Tuesday’s Top Trades Video below for an in-depth breakdown of the markets, along with detailed analysis of some of our favorite stocks and scan results. Don’t miss the actionable insights!