The stock market rally sits on a six-week win streak, with the Dow Jones and S&P 500 ending last week at fresh highs. Market leadership is broad, both in terms of sectors and temperament. Amid that strength, investors are crowding into stocks with subpar fundamentals, driving many of the more speculative names sharply higher this month.
The market is in what IBD refers to as a power trend: a final crescendo of a particularly strong market uptrend. This opens the door for investors to invest in some more speculative names, but only with a limited portion of their portfolio. Even then, investors must understand that such stocks come with greater risks. They tend to be highly volatile and at risk of making huge moves — either up or down.
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Using Power Trends And Follow-Throughs In Stock Market Rally
A power trend usually ends with a major index’s 21-day exponential moving average crossing back below its 50-moving average, according to IBD trading principles.
Nuclear energy technology development companies, along with bitcoin stocks and a few space plays have skyrocketed in the stock market this month. Other more speculative plays that have surged are Trump Media & Technology (DJT), Carvana (CVNA) and Upstart (UPST).
The Donald Trump-backed DJT has skyrocketed 84% in October, advancing 17% last week. Carvana stock has jumped nearly 10% in October and has gained 54% since hitting a recent low of 124.39 on Sept. 10. Meanwhile, Upstart, the AI cloud-based lending platform, has rallied more than 32% this month. Similar to Carvana, Upstart hit a recent low of 31.92 on Sept. 1o and has gained 66% since then.
It should be noted that many of the speculative stocks surging in October appear on the subreddit r/WallStreetBets site. Website ApeWisdom shows Carvana, DJT, Oklo (OKLO), NuScale Power (SMR), AST SpaceMobile (ASTS), Rocket Lab USA (RKLB) were among the trending stocks on r/WallStreetBets through the weekend.
Stock Market Risk: Nuke Stocks
Oklo — the nuclear power startup backed by OpenAI head Sam Altman — has surged more than 125% in October as major hyperscalers have decided to double down on the nuclear renaissance driven by data centers and artificial intelligence.
Amazon.com (AMZN) and Alphabet (GOOGL) both recently inked nuclear deals, sending nuclear-related stocks higher.
Oklo stock advanced around 7% during premarket trade on Monday. Shares ended last week up 99% after surging 40.5% on Wednesday and clearing an early entry Tuesday. The Altman-backed developer small modular reactors, or SMRs, has soared around 190% since Microsoft (MSFT) and Constellation Energy (CEG) signed a two-decade deal on Sept. 20.
This Sam Altman Startup Has Exploded 125% This Month As Nuclear Stocks Heat Up
ARK Invest’s Cathie Wood has been building a position in Oklo worth more than $2 million since mid-July. Peter Thiel is also a major investor in Oklo.
Fellow SMR-focused company Nano Nuclear Energy (NNE) surged 13.6% last week and is up 41% on the month. NNE shares leapt 37.8% on Wednesday.
Meanwhile, NuScale Power shares soared 40% on Wednesday, finishing last week up more than 38%. SMR shares have jumped 57.2% in October.
Volatility Meter: Space Stocks
Space-based telecommunications provider AST SpaceMobile rebounded above a key moving average on Oct. 16.
ASTS stock has gained 7.6% this month but has rocketed 367% higher on the year on the strength of a 274% advance in May.
Meanwhile, Long Beach, Calif.-based Rocket Lab USA provides aerospace launching services and produces components for small to medium-sized spacecraft and satellites, with the goal of making space launches more accessible and affordable. The company on Oct. 7 announced it was selected by NASA to complete a study for retrieving rock samples from Mars and returning them to Earth.
Rocket Lab is working on a mission concept, which it says will be delivered at a “fraction” of the current projected program cost and conclude several years earlier than the current expected return date in 2040.
SpaceX Rival Rockets Past Buy Point, But Beware Of Reentry
Rocket Lab stock is up more than 11% during stock market action in October, after surging 55% in September. RKLB is up 96% in 2024.
Stock Market Mines For Bitcoin Gains
Among publicly traded bitcoin miners, Bit Digital (BTBT), Hive Digital (HIVE) and Hut 8 (HUT) have advanced between 7% and 22% in October.
Bitcoin Miners Forge Lucrative AI Deals. They Have A Big Advantage.
Fellow bitcoin miners Core Scientific (CORZ) and Iren (IREN) have gained 8% and 12.4%, respectively this month.
Bitcoin stock Bitdeer Technologies (BTDR) is up nearly 11%.
Cipher Mining (CIFR) has surged more than 28% and TeraWulf (WULF) has added 12% in October. Bitdeer Technologies, Cipher Mining and TeraWulf are exploring AI opportunities or testing pilot programs.
Please follow Kit Norton on X @KitNorton for more coverage.
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