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 set of technical factors combined into conditions that are most ideal for trend traders. 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.
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, Carvana and Upstart.
The Donald Trump-backed DJT had skyrocketed 114% in October, advancing 17% last week. Carvana stock had jumped 13% in October and gained more than 50% since hitting a recent low of 124.39 on Sept. 10. Meanwhile, Upstart, the AI cloud-based lending platform, had rallied 30% this month. Similar to Carvana, Upstart hit a recent low of 31.92 on Sept. 1o and has gained 62% 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, NuScale Power, AST SpaceMobile, Rocket Lab USA were among the trending stocks on r/WallStreetBets through the weekend.
Stock Market Risk: Nuke Stocks
Heading into Wednesday's market open, Oklo — the nuclear power startup backed by OpenAI head Sam Altman — has surged more than 157% in October as major hyperscalers have decided to double down on the nuclear renaissance driven by data centers and artificial intelligence.
Amazon.com and Alphabet both recently inked nuclear deals, sending nuclear-related stocks higher.
Oklo stock sank 4.3% during premarket trade on Wednesday after dropping 6.7% to 20.82 on Tuesday. The stock jumped 22.4% in Monday's action.
Shares ended last week up 99%, including a 40.5% surge on Wednesday. The stock cleared an early entry last Tuesday. The Altman-backed developer small modular reactors, or SMRs, has soared around 230% since Microsoft and Constellation Energy signed a two-decade deal on Sept. 20.
This Sam Altman Startup Has Exploded 125% This Month As Nuclear Stocks Heat Up
Cathie Wood and her ARK Invest sold 378,589 shares of Oklo on Monday for $8.45 million, based on the stock's closing price. Prior to Monday, ARK Invest built a position of more than 1 million shares of Oklo since mid-July. Peter Thiel is also a major investor in Oklo.
Fellow SMR-focused company Nano Nuclear Energy declined 14% Tuesday. NNE advanced 34.2% Monday, adding to an 8.8% gain from Friday. The shares leapt 37.8% last Wednesday.
Meanwhile, NuScale Power also dropped 6% Tuesday. The stock advanced 4.2% to 18.98 Monday. SMR shares also soared 40% last Wednesday. SMR shares have jumped 54% 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 6.6% this month but has rocketed more than 360% 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 14% during stock market action in October, after surging 55% in September. RKLB is up about 100% in 2024.
Stock Market Mines For Bitcoin Gains
Among publicly traded bitcoin miners, Bit Digital, Hive Digital and Hut 8 have advanced between 13% and 28% in October.
Bitcoin Miners Forge Lucrative AI Deals. They Have A Big Advantage.
Fellow bitcoin miners Core Scientific and Iren have gained 15.6% and 10%, respectively this month.
Bitcoin stock Bitdeer Technologies is up 4.7%.
Cipher Mining has surged more than 42% and TeraWulf has added 39% 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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