VIP Exclusive: Red-Hot DefenseTech Stock’s Surge Set to Continue

Welcome to a special edition of Elite Trade Club reserved for our most active readers.

A discount retailer faces headwinds in a tough economic climate, an off-price retail stock sparks trader interest with unusual options activity, and an AI-driven defense tech stock rides high on breakthrough contracts. Here’s what to watch this week.

Here’s what we’re watching this week.

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Dollar General

Ticker: DG | Market Cap: $24.4B | Catalyst: Earnings on Tuesday

Dollar General reports earnings Tuesday amidst a weakening economy that’s squeezing low-income consumers. The Fed’s Beige Book drops Wednesday at 2:00 PM EST, making DG’s release a key consumer sentiment gauge. 

Heavy reliance on discretionary spending leaves it vulnerable, with analysts expecting cautious guidance; however, its discounted nature makes it more resilient than pricier retail picks, such as Target (NYSE: TGT), as evidenced by their recent and ongoing woes. 

Forecasts predict $1.45 quarterly EPS and 2% revenue growth. Despite tariff mitigation efforts, DG’s precarious position reflects broader retail challenges. Traders should watch for guidance revisions, as a weak outlook could pressure shares, while a resilient report might spark a short-term bounce in this oversold stock

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Palantir Technologies

Ticker: PLTR | Market Cap: $310.B | Catalyst: All-Time High

Palantir’s 75% year-to-date surge hit new highs after a $250M defense contract for autonomous systems. Trading at a massive earnings multiple, its AI-driven growth in defense and commercial sectors fuels momentum. Last week’s 30% volume spike reflects strong investor appetite. 

While valuations are steep, Palantir’s unique positioning in high-growth markets (and cozy relationship across the Trump administration) justifies the premium for risk-tolerant investors. 

Recent contract wins underscore its role in next-gen defense tech. Still, traders should monitor for pullbacks, as high multiples could invite volatility if sentiment shifts, judicial or regulatory clampdowns occur, or broader markets correct. 

L3Harris Technologies

Ticker: LHX | Market Cap: $45.7B | Catalyst: Sector Momentum

L3Harris, up 17% in a year, is edging closer to all-time highs (though far far Palantir’s meteoric rise, to be fair) as increased defense spending boosts the entire defense sector. Its AI-driven surveillance and missile defense focus aligns with rising global demand while asset-heavy operations anchor the firm’s longevity. 

At 28x earnings, LHX offers value in the red-hot defense tech sector. Analysts project 8% upside with $280 targets. The recently announced administration defense spending budget increases have boosted the stock over the past month, with sustained volume signaling bullish conviction. 

As geopolitical tensions drive defense spending, L3Harris remains a stable growth play. Traders should watch for sector tailwinds, though macro risks like political budgetary theater could temper near-term gains.

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Rocket Companies

Ticker: RKT | Market Cap: $25.5B | Catalyst: High Short Interest

Rocket Companies, a leading mortgage lender, faces intense short interest at nearly 50% of its float, setting the stage for a potential squeeze. Shares are down 8% over the past year, pressured by high interest rates and a sluggish housing market. However, recent mortgage application upticks and easing rate hike fears could spark a rebound. 

Trading at 18x earnings, RKT is undervalued versus fintech peers. Unusual call option volume surged last week, hinting at bullish bets. If positive housing data emerges, shorts may cover, driving shares toward $16-$18. Risk-tolerant traders should monitor for momentum shifts.

TJX Companies

Ticker: TJX | Market Cap: $141.7B | Catalyst: Unusual Options Activity

TJX’s options market is hot, with 27,459 contracts traded Friday, up 83.3% from the monthly average. Bullish options flow showed $627,400 net sentiment, led by institutional calls. 

Despite falling over the past five days, TJX’s “6-4-U” breadth (six up, four down weeks) signals a strong chance of rebound next week (a bounce to $128-$130 is feasible at current pricing). 

Circle Internet Group

Ticker: CRCL | Catalyst: IPO on Thursday

Circle Internet Group’s Thursday IPO targets a $5B valuation, with shares priced at $22-$26. Its USD Coin (USDC) stablecoin and blockchain payment solutions attract institutional clients, bolstered by regulatory compliance. 

The crypto market’s volatility poses risks, but Circle’s focus on stable, scalable fintech sets it apart. The IPO taps a growing digital payments trend and an improving fintech IPO market, as evidenced by the recent eToro listing win.

Investors should monitor early trading for momentum, as strong institutional backing (which includes BlackRock and Cathie Wood’s suite of Ark funds) could drive a first-day pop. 

Conversely, broader crypto sentiment may cap upside if market conditions sour post-launch.

From discount retail’s economic struggles to off-price retail’s options frenzy, AI-powered defense tech momentum, sector tailwinds, and a fintech stablecoin IPO, this week’s catalysts could spark significant market swings. Gear up for action and position wisely to capitalize on the volatility ahead.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Jeremy Flint
Elite Trade Club

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