The Big 3: AAOI, KTOS, GE

The market's resilience in early June defies conventional logic, with major gains across sectors despite persistent uncertainty. Mike Schor of Prosper Trading Academy explains why he's betting on underperforming tech and defense stocks—Applied Opto Electronics (AAOI), Kratos (KTOS), and GE Aerospace (GE)—rather than chasing already-high AI and mega-cap names. His strategy hinges on technical breakouts, risk-reward asymmetry, and the belief that the market rewards patience: 'Trade what's in front of you, not what you think.' For AAOI, he targets a $199 breakout with a high-probability call fly; for KTOS, he sees a bullish bull pennant forming after a falling wedge; and for GE, he waits for confirmation above $324.60 before entering a 340/350 call spread. The episode reveals a contrarian edge: in a market that rewards momentum, the real alpha may lie in catching laggards before they surge. The technical analysis underscores a deeper theme: price action trumps prediction. Moving averages, RSI, and volume profiles are tools, not oracles. Schor emphasizes that even with bearish divergence or declining volume, a breakout above key levels—like KTOS’s 66.90 or GE’s 324.60—can signal a shift in momentum. The real insight? Markets don’t care what you think. But they do care about structure, confluence, and the willingness to act when the chart speaks.