What to Buy in the “Ceasefire Rally”
BY MICHAEL SALVATORE, EDITOR, TRADESMITH DAILY
In This Digest:
- New sell signals outnumber buys nearly 5-to-1 – even as the ceasefire rally lifts prices
- The stocks with the highest Quantum Scores are pulling back to buy-the-dip levels
- Our Platinum members have been beta-testing a new trading tool – and next week, you can try it, too
Talk about a close call…
Late Tuesday night – roughly 90 minutes before his 8 p.m. deadline to “end” Iranian civilization – President Trump agreed to a two-week ceasefire.
The deal, brokered by Pakistan, suspends U.S. and Israeli strikes in exchange for Iran reopening the Strait of Hormuz – the narrow waterway that normally carries about a fifth of the world’s oil and natural gas supplies.
Iran’s foreign minister confirmed the agreement, writing that safe passage through the Strait would resume “via coordination with Iran’s Armed Forces.”
Markets didn’t wait for the ink to dry. S&P 500 futures jumped 2.6% overnight. That’s the kind of move that, if it holds, would mark the index’s best day of the year.
Emerging-market stocks rallied the most since 2022, with the iShares Core MSCI Emerging Markets ETF (IEMG) up 5.8% premarket Wednesday.
And Brent crude oil – the international benchmark – plunged 14% to about $94 a barrel. That’s its sharpest one-day drop since the war began.
This is the clearest risk-on signal the market has sent in 2026.
If the ceasefire holds and a more lasting deal gets done in this two-week window, stocks could see a more sustained lift. It might even be enough to take them out of the 2026 rut and into new highs.
Or… the truce could all fall apart. Israel has just launched the largest wave of strikes against Iran’s ally in Lebanon, Hezbollah, since the war began. There are even reports of rogue Iranian missiles hitting targets in the UAE and Kuwait – likely due to the decentralized nature of Iran’s military.
We don’t pretend to be Middle East experts. And we have no clue what’s next for Iran. So the question for us at TradeSmith remains the same: Which stocks are worth buying – and which should be avoided – based on what the data says?
Our tools have the answer.
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The buy-sell divide in our system tells an interesting story…
Let’s start with a scan of the most recent Short-Term Health signals across the S&P 500, Dow, and the tech-packed Nasdaq 100, as well as the mid-cap S&P 400, and small-cap S&P 600.
Short-Term Health is TradeSmith’s most sensitive trend indicator. It looks at how a stock or index has been trading and then flags the kind of abnormalities that signal shifts in momentum.
Green means buy. Yellow means caution. Red means sell.
Over the last seven days, five stocks across all five of those indexes flashed new Green Zone buy signals. And they’ve all occurred over the last two days:
Car rental company Avis Budget Group (CAR) leads the list – up 74.9% in a week after its Green signal fired. But we’d caution you against diving into this one.
CAR seems to be in the midst of a short squeeze. That’s when stocks that are heavily bet against come into the crosshairs of buyers who look to force shorts out of position. Green signal or not, this one warrants caution.
Meanwhile, trucking logistics firm Landstar Systems (LSTR) and chip designer Arm Holdings (ARM) also triggered new buys in recent days, alongside server maker Hewlett Packard Enterprise (HPE) and internet infrastructure company VeriSign (VRSN). These signals are all much more genuine – not a product of an artificial push.
Five new buy signals in the last week sounds healthy… until you look at the flip side.
Over the same stretch, 23 stocksflashed new Red Zone sell signals. Here are the five most recent:
Storage REIT Public Storage (PSA), medical device maker Edwards Lifesciences (EW), discount retailer Dollar General (DG), hospital operator Tenet Healthcare (THC), and building equipment company Carrier Global (CARR).
Five different industries, all flashing short-term sell signals at the same time.
Also note that several of these stocks are up over the last week. PSA gained 3.1%. Dollar General rose 2.6%. Tenet Healthcare climbed 3.1%.
Rising prices with fresh sell signals might seem like a contradiction. But when a stock is moving higher while Short-Term Health turns Red, it means the rally isn’t supported by the kind of sustained momentum that healthy uptrends produce.
There’s also the fact that we’re seeing 23 new sell signals versus five new buys over the past week. That’s nearly 5-to-1 in favor of the bears.
Today’s ceasefire rally is welcome news – but underneath it, the market is still under stress.
All the more reason to stay choosy about what you buy.
Here are five stocks worth buying on this dip…
But let’s say you’re bullish and want to buy the dip. How do you find the stocks worth buying in a market like this?
By stacking multiple confirming signals on top of each other.
We started with our Short-Term Health Green Zone filter – stocks in healthy uptrends.
But let’s add two more filters:
- Stocks that have pulled back over the last week, meaning they’re trading at a short-term discount
- Stocks that have a Quantum Score of 90 or higher
If you’ve been with us for some time, you’ll know that the Quantum Score looks for unusually large institutional money flows into stocks with strong fundamental growth rates.
The result is a list of stocks that are in confirmed uptrends (in Short-Term Health Green Zones) that are temporarily marked down and backed by strong fundamentals and institutional buying pressure (high Quantum Score).
Here are the top five:
Two names stand out.
United Therapeutics (UTHR) scores a 97.7 – one of the highest Quantum Scores in our entire database. It’s been in the Green Zone for more than four weeks and is down 4.6% over the last week.
UTHR is a biotech focused on organ transplants. It’s definitely not a headline name unless you’re deep in the biotech rabbit hole.
But a 97.7 score puts UTHR in the top 3% of all stocks we track. And a short-term pullback in a stock this strong is the textbook setup for buying the dip – not a reason to run.
Antero Resources (AR) scores a 95.9 and has been in the Green Zone for more than a month. It’s down 4.2% over the last week.
Antero is one of the largest natural gas producers in Appalachia. Regular readers will recognize the name. We flagged it as a new Short-Term Health Green signal back in early March, right before the Iran war pushed energy prices sharply higher.
Now, a ceasefire could take some of the urgency out of the energy trade. But Antero’s strength isn’t built solely on the war premium – it’s backed by strong fundamentals and sustained by institutional buying. A dip in a stock this highly rated, still holding its Green Zone, is worth a close look regardless of what happens in the Persian Gulf.
The other three names on the list – specialty metals manufacturer Carpenter Technology (CRS), midstream energy company Kinetik Holdings (KNTK), and respiratory drug maker Innoviva (INVA) – all score above 93 on the Quantum Score and remain in the Green Zone despite their recent pullbacks.
There’s no unifying theme tying these together, like we saw with energy and semiconductors earlier this year.
Instead, we’re seeing a broadening out, where stocks with momentum and institutional buying are at a recent discount.
And the approach we just used – layering multiple TradeSmith tools to narrow the field – is about to get a whole lot more powerful.
We’re launching the most advanced trading tool we’ve ever built…
For the past several months, our Platinum subscribers have had early access to a revolutionary new trading tool we’ve developed.
And starting next Wednesday, April 15, we’re giving you and your fellow TradeSmith Daily readers the chance to test drive a beta version for free.
You’ve heard of how the FBI uses behavioral profiling to catch criminals. They study patterns of past behavior to predict what a suspect is likely to do next.
Most investors don’t realize it. But every stock has its own behavioral profile, too – its own habits, quirks, and tells.
And once you learn how to read that profile, the market starts to look less like chaos and more like a place where patterns govern what happens next.
That’s what our new trading tool does. It builds a behavioral profile of more than 2,000 stocks – and scans them every day for the specific patterns that have historically preceded big moves.
This isn’t just a revolutionary piece of trading software. This is a whole new way to think about markets… and a new way to make money.
Whereas fundamental analysis asks what a company is worth… and technical analysis asks how it’s trading… this new approach looks at how this specific stock behaves – and when that behavior signals a big move.
And the results have blown us away. In a one-year backtest, the approach outperformed the S&P 500 by 3-to-1.
I won’t go into too much detail here. Our CEO, Keith Kaplan, will be revealing the tool at a launch event on Wednesday, April 22.
And I’ll be passing on a sign-up link here in TradeSmith Daily next Wednesday, a week ahead of the launch. So make sure to tune in for your chance to “test drive” our new software for free.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily
RJ Hamster 