These Two Energy Signals Are a Warning About Iran
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In This Digest:
- Our AI forecasting engine is calling for a second surge in energy stocks
- A signal with 82.4% historical accuracy just fired on this solar stock
- Your last chance to join the Signals Master Portfolio before it launches Thursday
The fog of war continues to hang over the Persian Gulf…
Yesterday, an Iranian drone attack set an oil refinery on fire in the UAE, the U.S. Navy sank six Iranian boats in the Strait of Hormuz, and Iran warned that any foreign military force entering the strait “will be targeted.”
And both Iran and the U.S. claim they’re in control.
In a news conference this morning, Defense Secretary Pete Hegseth said two commercial vessels had passed through the strait under U.S. military escort this week.
Mohammad Bagher Ghalibaf, Iran’s top negotiator, said Iran has effectively blockaded the waterway since the war began in February.
Ships are burning, but oil is moving. The ceasefire continues to hold, but only by a fraying thread.
Despite the confusion, our indicators are aligned with clarity on the best sector to own this month…
Predictive Alpha called the energy rally before the news broke…
Every morning before the market opens, TradeSmith’s Predictive Alpha engine runs price forecasts on thousands of stocks and exchange-traded funds (ETFs) – including the major sector ETFs.
These funds track broad slices of the market like energy (XLE), financials (XLF), technology (XLK), healthcare (XLV), and more. One share of a sector ETF gives you instant exposure to dozens of companies at once.
On Monday morning, the highest forecast among all sector ETFs we track pointed at XLE – the SPDR Energy Select Sector ETF, which holds the largest energy companies in the S&P 500.
Check out the top five Predictive Alpha forecasts on sector ETFs below:
Regular readers know Predictive Alpha is TradeSmith’s AI-powered price forecasting engine.
It’s best thought of as a large numbers model. In the same way large language models like ChatGPT predict the next word in a sequence, Predictive Alpha predicts the next price move.
We trained it on more than 100 billion stock market data points – patterns hidden in the noise – and it projects where a stock is likely to land up to 21 trading days out.
And today, the Predictive Alpha forecast for XLE stands out with a gain of 3.4% from where the ETF closed Monday. And these forecasts on XLE have been accurate down to the penny more than 78% of the time in the past.
If you’re looking for one sector to stay positioned in through the end of May, our tools are pointing at energy.
But while big oil and gas stocks make up the bulk of XLE’s holdings, it’s not the only way to trade the energy sector.
Our Signals software just fired on this solar stock…
When fossil fuel supply gets disrupted as it is right now, it’s worth keeping an eye on stocks in the renewable energy sector.
Especially when they’re firing high-quality trade setups from TradeSmith’s new Signals software.
Signals is TradeSmith’s AI-powered trading platform. Each morning before the opening bell, it scans more than 2,400 stocks and runs millions of calculations searching for rare statistical patterns in each one.
It’s looking for unique anomalies in price momentum, volatility, and matching market conditions that have historically preceded profitable moves in individual stocks.
Think of it like a “thumbprint.” Every high-probability trade has one. The system’s job is to find when that thumbprint reappears.
And right now, such a thumbprint is showing up in solar company Nextracker (NXT).
Nextracker makes solar trackers – the mechanical systems that continuously rotate solar panels to follow the sun’s arc throughout the day rather than sitting fixed in place. It’s a major point of efficiency for solar farms.
On Monday, Signals fired a Pivot signal on NXT. Take a look at the historical performance of this signal below…
Pivots are a type of signal that looks for signs a stock is about to change direction. In the case of NXT, our software is flagging rising underlying momentum, despite the price falling over the past four trading days.
In NXT’s case, this signal has appeared 98 times over the past five years.
The stock has been positive 82.4% of the time after it fired. The average return across all trades – winners and losers included – is 3.7%. The average winner gains 6.1%, while the average loser trade loses 7.6%.
Most often, this signal on NXT takes just four days to play out.
Keep an eye on NXT over the next few days for any signs of a fast short-term recovery. And if you take this trade, be sure to grab profits once it closes 6% or more from Friday’s close – that’s the exit strategy.
The Signals Master Portfolio launches this Thursday…
This Thursday, May 7, our Signals team launches the Signals Master Portfolio – a three-position trading strategy built on the Signals technology we’ve been introducing you to over the past few weeks.
The concept is simple: You hold a constantly rotating group of three S&P 500 stocks with active signals.
Despite this, the strategy is highly effective and not just making money, but also shedding risk from a typical buy-and-hold strategy.
We backtested it from January 2020 through January 2026 – a time that included the COVID crash, the 2022 bear market, and the inflation and rate cycle that followed.
It produced a compounded annual return of 54% vs. 15% for the S&P 500. That’s nearly four times better.
At the same time, the worst drawdown in the strategy was 18.1% — well shy of the S&P 500’s worst drawdown of 25% in 2022.
We closed our Signals charter offer last week. But we’re reopening the door for two days – starting today.
If you’ve been following this week’s coverage and like what you’ve seen, this is your chance to join Signals before the Master Portfolio launches on Thursday. After that, the opportunity is gone.
Watch the full story from our CEO, Keith Kaplan, and join before the window closes.
To building wealth beyond measure,
Michael Salvatore
Editor, TradeSmith Daily