The week closed on a green day, but the gains were modest. With the market sitting near all-time highs and only slightly green — though a bit stronger than the previous day — it was still registering an "inside day," meaning the price range fell within the prior session's range. That warrants a stance of cautious bullishness: still leaning long, but acknowledging the risk of being extended at all-time highs.
Two macro catalysts framed the session: a new Fed chair, and optimism around a peace deal. The peace development is more accurately described as "the discussion to be discussed of the discussion of the peace deal" — encouraging, but not yet signed or finalized. The hope is that it manifests into something more material and long-term so the market can move past the overhang. The week was also a holiday-shortened trading week.
What follows are three stocks, three charts, and three trades.
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Pick 1: Cummins (CMI) — Bullish
The Business Case
Cummins is best known for its diesel engines used in trucks, buses, and heavy-duty equipment. More broadly, the company makes the engines, generators, and power systems that help move goods across the world. The newer, more compelling angle is a recently announced partnership with Circle Energy to supply natural gas generators for AI data centers through 2030.
This partnership gives Cummins a growth trajectory and a way to participate in the AI boom without having to manufacture chips. This is the classic "picks and shovels" play: rather than betting on who builds the best chips or the best software, you invest in the companies providing the energy and infrastructure that the chip makers and data center builders depend on. Cummins doesn't have to sell the winning product, service, or software — it can simply support the players trying to do exactly that. That positioning at one of the AI buildout's key bottlenecks (energy and power infrastructure) is what makes the growth path so attractive.
The Technical Picture
On the fundamentals-meets-charts view, the stock shows a "W pattern" bounce off the 50-day moving average and appears to be breaking above its 52-week high, suggesting more upside.
On the weekly chart (a three-year weekly view), there is a bull flag running up from roughly $515 — a level that serves as horizontal support and coincides with the 20-week moving average. The flag points to a potential target near $785. That is the conservative target, derived by drawing the flag pole from the bottom of the flag rather than the top. Traders have the choice either way: drawing from the bottom is more conservative, while drawing from the top is more aggressive.
On the daily chart, the setup looks more constructive and casual as the stock breaks to new highs. For risk management on the daily timeframe, some traders will watch the $715 ledge. From a trend-trading standpoint, the confluence of the 50-day and 20-day moving averages cannot be ignored and offers a sensible reference point.
The Trade
The trade is a bull put spread (a credit spread) with a July 17, 2026 expiration — a short-term play, roughly 29 days out.
Initially the trade was submitted at a higher strike (the $630 level), but that was deemed too close to where the price action actually is, so the strikes were adjusted in real time. The revised trade is:
- Sell the $540 put (going for about $2.65)
- Buy the $530 put (going for about $1.65)
This yields a net $1 credit while putting up $10 of risk, for a potential 10% return. The key advantage of dropping the strikes is a bigger buffer — roughly 100 points of room for the stock to fall and the trade to still win. This is the appeal of the structure: you're right if the stock goes up, right if it goes sideways, and still right even if it falls about 100 points.
The "I'm wrong" level: With $100 of cushion built in, the level to watch is the 50-day moving average. The stock has bounced off it two or three times (the W pattern). If it breaks that 50-day moving average, the pattern is broken and it would be time to consider taking a small loss. But with 29 days of duration and a 100-point cushion, only a large, sudden sell-off — something "out of the sky" knocking it down 100 dollars — would break the trade, which is not foreseen. The strength of this structure is that it can slowly creep down toward the "I'm wrong" level, giving plenty of warning rather than failing abruptly.
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Pick 2: Boeing (BA) — Neutral / Range-Bound
The Business Case
Boeing makes commercial airplanes, defense aircraft, and space systems, among other things. There is a personal affinity for the company — flying on their planes and wanting them to succeed — but real questions remain. Can Boeing fix production, meaning put out planes faster and meet delivery deadlines? And, crucially, can it maintain or improve quality while ramping delivery volume? So far the quality question has been a dark cloud over the company, which is precisely why the stock has been trading sideways.
The stance is neither bearish nor bullish. Boeing is expected to keep trading in a sideways range until the company proves itself, even though it is increasing plane deliveries. The broader aerospace sector also has a bullish tailwind from a potential resolution of the Iran conflict.
The Technical Picture
The chart confirms the sideways action. Long-range support sits around $135–$140. Overhead, $265 is a very important level — the stock has clearly run up to it a few times and pulled back to the same ledge each time. In the shorter run, the 200-week moving average has been acting as support, with two solid support tests recently. Whether that proves to be anything more than a downside risk-management marker remains to be seen: under the $197–$200 area, traders could choose to get more defensive. A break through $265, however, opens a path back up toward $320 — a level that was clearly important when the stock originally fell through it.
The stock was trading at $222.88, sitting almost exactly in the middle of the break-even range of the proposed trade.
The Trade
This is also a short-term trade with a July 17, 2026 expiration. The setup is ideal for an iron condor (or a butterfly), because the stock sits right in the middle of a range with well-defined support and resistance. These strategies shine when a stock is range-bound with no earnings or major events between entry and exit. Earnings land on July 29, but exiting on July 17 gets the trade out before any announcement can spike the stock up or down.
The iron condor combines two credit spreads:
- Bear call spread (top end): buy the $260 call, sell the $250 call — about a $1 net credit.
- Bull put spread (bottom end): sell the $205 put, buy the $195 put — about a $1 net credit.
Total risk is $10 with $2 of credit brought in, giving a potential 20% return.
A key structural point: the stock cannot be in two places at once — it can't be both up and down at the same time — so one of those $1 credits will absolutely be kept. In the perfect scenario where the stock stays in the middle, both credits are kept. The trade gives roughly a $20–$25 cushion to the upside and about $20 to the downside, within which the stock can move and the trade still wins. The short time frame is deliberate: it minimizes the time available for news to push the stock sharply in either direction, and the position is closed before earnings.
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Pick 3: Marsh & McLennan (MMC) — Bearish
The Business Case
Marsh & McLennan has been a notable underperformer relative to the market both year-to-date and over the trailing 52 weeks. The chart has been in a downtrend since roughly April 2025, with the stock simply bottoming — described as being in "the penalty box" (a hockey metaphor: a stock trending up and to the right is in the winner's circle, while one trending down and to the right is in the penalty box).
The company is essentially an insurance play that handles risk — it sells insurance to insurers and provides risk-management expertise and consultations. The bearish thesis centers on an AI disruption question: will companies rely less on Marsh's outside expertise and consultations if they can plug their own data into an AI model and build risk models themselves — potentially better than an outside firm? Whether that's actually the case is uncertain, but seeing the chart raised the question of where future growth will come from. If that growth source can't be identified, the market won't reward the company for staying stagnant. The expectation is that the stock continues to trade down until it finds a new path of growth — or until it implements AI itself and demonstrates improved profit margins or a better service than customers could produce on their own.
The Technical Picture
The recent price action was bad enough to draw a muttered "gross" reaction. The long-term chart once looked great, but the near-term picture is unimpressive. This is a strong reminder that traders must actively manage positions and not ignore them. After a phenomenal move upward, once there was reason to take money off the table, the prudent move was to get a little defensive — not necessarily selling everything, but piecing out on weakness.
The stock has been tracking its 20-week moving average for the better part of the last year. Rallies into the 20-day have been sold, and bull/bear flags into the 20-day have been sold; another such flag is being completed right now on the weekly, implying a continuation move lower. Compounding the bearish trend, the 50-week moving average has crossed below the 200-week moving average — a so-called "bear death cross" on the weekly timeframe. From a trend standpoint, the weekly look is not favorable at all. (Notably, a bear death cross hadn't been discussed in this segment in the past year.)
The Trade
Unlike the first two, this is a longer-dated, outright bearish trade. Support, if the stock keeps falling, sits near $148. The trade is the January 15, 2027 $180 strike put, which was priced around $21 before the market opened; with the stock down about 340 (roughly $3.40) intraday, it would cost a bit more.
The break-even is $159, with about 211 days of duration. The thesis is that the stock continues to fall toward support at $148. If it reaches $148, that would put the put roughly $10 in the money on an intrinsic basis — and if it gets there before the 211 days elapse, there would also be remaining time value on top of the intrinsic value. The core rationale is simply that there's nothing visible to turn the stock around.
The "I'm wrong" level: Any meaningful break above the 50-day moving average warrants caution, since the stock could turn and run up to it. However, since April of last year the long-term chart has shown the stock cannot break through or hold above that level. So a move back up to the 50-day wouldn't be cause for panic, and given that the stock is heading down today, panic isn't likely to be necessary anytime soon.
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Summary of the Three Setups
- Cummins (CMI): Bullish, short-term (~29 days). A bull put spread selling the $540 put and buying the $530 put for a $1 credit on $10 risk (10% potential), backed by an AI-infrastructure "picks and shovels" growth story and a bull flag targeting ~$785. Wrong below the 50-day moving average.
- Boeing (BA): Neutral/range-bound, short-term. An iron condor (bear call $260/$250, bull put $205/$195) for $2 of credit on $10 risk (20% potential), exiting July 17 ahead of July 29 earnings. The trade profits as long as Boeing stays range-bound, with one credit guaranteed since the stock can't be in two places at once.
- Marsh & McLennan (MMC): Bearish, longer-term (~211 days). A January 2027 $180 put with a $159 break-even, targeting support at $148, justified by a persistent downtrend, a bear death cross, and AI-disruption concerns. Caution only if it meaningfully breaks above the 50-day moving average.
