As stocks wobble and volatility picks up, we are ready to deploy our 30%+ cash that we diligently raised over the past 2 months for our TPO Portfolio. In this post, we add key technical levels we are watching across our highest-conviction names that we either own or want to initiate new positions in for the portfolio.

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Let’s Set The Stage

Stocks are finally starting to wobble after the S&P 500 staged a historic rally since March 30th.

Key support levels broke across the board on elevated volume Friday, 06/05, and the price action over the last two days has reduced the probability of us seeing another higher high in June.

At The Pragmatic Optimist, our portfolio is generating alpha against major ETFs and indices. For example, the TPO Portfolio has delivered gains of 28% since March 1 💪, beating both QQQ and AIQ . Month-to-date, the TPO portfolio has outperformed the major benchmark ETFs mentioned, demonstrating resilience despite our concentrated exposure to high-beta, rapid-growth technology/AI companies.

The TPO Portfolio’s relative outperformance amidst rising market volatility stems from proactive liquidity management on our part that allowed us to meaningfully raise our cash positions from 15% to 35% 💸 between April and May this year, leaving us with enough dry powder to opportunistically deploy during pullbacks.

We did this by trimming several of our existing positions where the rally likely became overstretched. Marvell , Astera Labs , AMD , CrowdStrike , and Micron are some examples. We also expanded our cash position by exiting holdings where we believed that the full price potential had been reached in the near term, such as Arista Networks . Finally, we also exited positions where our conviction had faded and our cost basis was too unfavorable, such as Zscaler and Microsoft .

In addition to these tactical cash management measures, we have also been refining our watchlist that consists of AI stocks with the highest Conviction Scores in our AI Stock Tracker. These are stocks that rank some of the highest scores per our Conviction Score rating model based on fundamental parameters.

In this post, we will provide a technical analysis for our highest conviction stocks that we are tracking. These names represent either core existing holdings within the TPO Portfolio or high-priority targets in our watchlist for new capital deployment.

By adding a technical layer to complement the fundamental standing of our highest-conviction names, we hope to initiate and/or expand our position sizes of holdings in the TPO Portfolio at a more optimal risk-reward.

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Stocks We Already Own In The Portfolio

In this section, we will go through the technical setups of stocks we already own in the TPO portfolio, while in the following section, we will expand on the 5 AI companies we are closely tracking as part of our watchlist.

The stocks we will cover in this section are Celestica , Micron $MU, AMD $AMD, Marvell $MRVL, Astera Labs $ALAB, Meta Platforms $META, Palantir $PLTR, Amazon $AMZN, GE Vernova $GEV, NextEra Energy $NEE and CrowdStrike $CRWD. Together, they make up over ~35% of all our portfolio capital.

Note that we want to expand our positions in some of these names should they come to key levels that we will discuss below.

1. Celestica

Starting with Celestica, we initiated a position in the TPO Portfolio on 06/02 at an Underweight allocation at 2.27% of the portfolio. Our Conviction score on Celestica has materially improved on a sequential basis, especially on the “Profitability” parameter.

As explained in a note sent out to subscribers last week, we believe Alphabet’s $80B capital raise could unlock a $10–16B networking opportunity for Celestica, anchoring its CCS segment’s ~70% topline growth target by CY26.

At this point, we believe CLS stock remains in a long-term bullish uptrend, and the pullback should hold between the $339-317 levels. In case the pullback deepens, the stock can also reach as low as $285/share, which would represent a further downside of 23% from current levels.

Our trading plan for Celestica: we will add our second tranche at $339-317, followed by a potentially third tranche at $285, making it a 4-5% position. This will be considered a Full allocation. $244/share must hold for Celestica’s bull thesis to stay on track.

2. Micron

We recently executed a partial profit-take on Micron, as noted in our Live Trade Alerts to subscribers, reducing our position by ~33% and securing a 177%+ return as a result from the trade. This tactical reduction has now brought Micron to a 1.7% Starter weight in our portfolio. Fundamentally, Micron boasts one of the highest Conviction Scores among all AI stocks we track. From a technical perspective, we believe that MU is still part of a long-term bull market.

However, even structural bull markets, especially in extended cases like Micron, witness meaningful corrections that require active risk mitigation from investors, in our opinion. Our models suggest Micron is on the verge of a sharp technical (local) correction.

In Micron’s chart below, we identify the exact high-conviction support levels where we intend to scale back into our Micron position.

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