How a Theme Can Create Great Trading Opportunities

As a short-term trader, I focus on trends, hot sectors and themes.

You might have noticed that I’ve been talking about space and semi-conductors for months.

Maybe I was a little early with the space theme

But things are about to heat up…

There’s so much hype around the SpaceX IPO.

Every day you hear somebody talking about it.

And when you have this level of anticipation, it drives interest.

But outside of some of these weird secondaries, it’s not easy to get access to SpaceX before the June 12 IPO.

So, buyers do something else…

The Big Picture

I think the whole space sector is going to run up into the SpaceX IPO on June 12.

And now that we know the date, I’m looking forward to watching this whole thing play out.

But the important thing is to understand why the sector is gonna run.

When you have that level of anticipation, where everyone expects SpaceX to be the biggest IPO in history, it pulls eyeballs and money in. Everyone wants exposure.

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Now, I have students who have traded Destiny Tech100 Inc. (NYSE: DXYZ) which is an ETF with SpaceX exposure. But ETFs are what I call wallet padders. They tend to move a little slower. They’re reliable trades, but you’re not gonna make a killing.

So, the next thing traders do is look for other theme related opportunities. Those are companies in the same sector.

For example, Rocket Lab Corporation (NASDAQ: RKLB):

BlackSky Technology (NYSE: BKSY) is another example:

Then there are the sympathy plays. Usually these are small companies. Sometimes they’re not even real. But you can bet they’ll put out press releases with the word “space” or “satellite” or something similar. Like we’ve seen with AI recently.

Themes Multiply Headline Power

By now, the SpaceX IPO date is everywhere. And that means that every headline mentioning anything to do with space will hold that much more power. Again, it puts eyeballs on tickers.

So keep your eyes on the headlines over the next few weeks.

The PDT Space Theme Bonus

Now, this is a potential next-level IPO event. First, you got the biggest IPO in history. But only a week before that, the PDT rule change comes into effect. It won’t be right away for everyone, it depends on the broker.

But if you think about all the new money coming into the markets, all the hype around the IPO, and the momentum we’ve seen recently.

We could be in for quite a ride.

My Take

As always, I’m going to trade the patterns. There are gonna be absolute bangers over the next few weeks. But even though I love space, the old saying holds true: trade ‘em, don’t date ‘em.

Watchlist

Sticking to the theme, add Intuitive Machines, Inc. (NASDAQ: LUNR) to your watchlist:

LUNR is a slightly different business: space infrastructure. But at the end of the day, the thesis behind the idea is the same. This is all part of the SpaceX IPO theme.

On My Radar

• SpaceX IPO date announced: Put an X on June 12 calendarNews idea
• This is a healthy pullback, markets can’t go up every single day
• OpenAI just launched ChatGPT for personal finance. I’ll stick with my AI assistant Higgins.