Monday, September 29, 2025 |
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Welcome to The Strazza Letter, a free note with market insights from me, All Star Charts Chief Market Strategist Steve Strazza. |
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Speculative growth is back in the driver's seat with the flagship ARK fund kicking off the week with fresh cycle highs on both absolute and relative terms. We've been leaning back into this theme since early September, and this is just the latest piece of evidence that suggests we should keep pressing it. Crypto stocks have delivered big gains and continue to. Space and new nuclear names are heating back up. And quantum is the best basket of momentum out there right now. This is the same kind of environment where I find myself pulling up my drone watchlist more and more. We highlighted a handful of setups from this group of stocks back in July, just as they started to catch a bid. That was a false start, but after coiling up for a few more months, this group is taking off now. Here's our Custom Drone Index breaking out of a textbook continuation pattern. |
This is exactly the sequence we look for in speculative growth: explosive rallies, digestion through volatility compression, and then clean resolutions higher in the direction of the primary trend. That's all characteristic of a healthy recharge, not trend exhaustion. We believe drones are among the top places to be in speculative growth, yet these stocks are receiving zero attention The leaders are perfectly actionable right now, so I think it's worth reiterating two of our favorites. First, this is Unusual Machines $UMAC: |
UMAC is following through on a VWAP pinch pattern, with volatility compressed but curling higher off multi-month lows. I'm long above 13, targeting 20. Over longer timeframes, I'm looking for 32. Next is Red Cat Holdings $RCAT: |
RCAT is pressing against the upper bounds of an almost year-long base. The stock has tested its pivot highs multiple times over the past few weeks but has been unable to break through. I think it gets the job done any day now. I like buying strength above 11.75, with a target of 18.75. Over longer timeframes, our objective is 30. We've had tremendous success trading options in speculative growth stocks this year, and we think the current setups in RCAT and UMAC have outlier profit potential. We're long calls in both these stocks, and I like the way we're looking with plenty of time to go until expiration. And while we've already taken profits in some, both of these positions are currently trading slightly below what we initially paid for them. In other words, the calls are cheaper than they originally were, and the charts look better. I'll be looking to add exposure in the coming days. Join Breakout Multiplier risk-free and get our existing drone trades, plus the next one, delivered right to your inbox. Steve |
Steve Strazza | Chief Market Strategist, All Star Charts |
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