🚨 Watchlist Update: Multiple Buy Levels Triggered
Several stocks from our Top 10 Breakout Watchlist this week have already cleared their recommended buy levels. We covered MCD, USFD and TJX yesterday. Here are three more names breaking out:
RTX Corporation (NYSE: RTX) has broken out of a falling wedge pattern and cleared our buy level of $182.30. The stock is currently trading at $184.21 — roughly 1% above entry.
Hinge Health Inc. (NYSE: HNGE) pushed through the upper boundary of its uptrend channel and triggered our buy level of $64.00, closing last at $64.75.
REalloys Inc. (NASDAQ: ALOY) broke out of a symmetrical triangle pattern and edged past our buy level of $14.00, with its last close at $14.06.
Bottom line: Use trailing stops to lock in early gains and let the winners run. And now, on to today’s featured setup…
Velo3D, Inc. (NASDAQ: VELO) just broke out of a multi-month ascending channel on a powerful 35% single-session surge and looks headed even higher.
As we’ll get to just ahead, the combination of a powerful SpaceX-IPO-driven proxy bid, a credible Q1 operational turnaround alongside fresh defense and energy partnerships, and a fresh technical breakout makes VELO one of the more interesting setups on the board. Here’s what’s going on…
The Themes Behind the Move
Velo3D is a metal additive-manufacturing company that designs, builds, and sells industrial-grade 3D metal printers — most notably its Sapphire and Sapphire XC systems — alongside its proprietary Flow, Assure, and Intelligent Fusion software stack, serving the space, aviation, defense, automotive, energy, and industrial markets.
In plain English, when SpaceX needs to print a complex rocket-engine part that traditional CNC milling simply can’t reproduce — or when a defense contractor needs a certified domestic supplier for mission-critical aerospace components — Velo3D is one of the very few firms in the world they can call. Its business hinges on continued SpaceX integration, execution on its “Rapid Production Solution” (RPS) parts-production pivot, defense contract wins, and management’s stated path to positive EBITDA in the second half of 2026.
VELO’s latest move reflects a powerful confluence of developments — operational, commercial, and structural — that have come together in rapid succession to fundamentally reframe the company’s near-term growth trajectory after a near-death experience just 18 months ago.
| Theme / Catalyst | What Happened | Why Traders Care |
|---|---|---|
| SpaceX “proxy trade” frenzy + 35% single-session surge | VELO surged +35% in a single session on Thursday, June 11, heading into its strongest week of the year. The move is largely a momentum-driven “proxy trade” tied to retail and institutional positioning around Elon Musk’s upcoming SpaceX IPO (expected to trade under ticker SPCX at a ~$1.77 trillion valuation). With retail allocations for SPCX heavily restricted, traders are piling into liquid supply-chain alternatives — and SpaceX uses Velo3D’s Sapphire XC printers for complex Raptor engine components. | VELO is now functioning as the cleanest publicly tradable proxy for SpaceX exposure ahead of the IPO. With ~25 Sapphire printers deployed at SpaceX and platform-qualified parts inside next-gen Raptor 4 engines, the proxy thesis isn’t loose narrative — it’s underwritten by real, deep integration. |
| Credible Q1 operational turnaround + new partnerships | On May 12, Velo3D reported Q1 2026 revenue of $13.8 million (+48% YoY), gross margin of 17.2% (vs. -73.6% in Q4 2025), and a sharply narrowed GAAP net loss of $7.0M (from $25.0M). Management reaffirmed FY2026 guidance of $60–70M revenue, >30% gross margin in H2, and positive EBITDA in H2 2026. The quarter was followed by a strategic partnership with Aurelia Technologies (June 9) targeting gas turbine systems. | This is the first hard evidence that the post-restructuring turnaround thesis is more than a story. Margins flipped positive, losses are shrinking, and the new Aurelia tie-up extends the addressable market beyond aerospace and defense into energy/power generation — meaningfully de-risking customer concentration over time. |
| Sector tailwinds | Defense and commercial aerospace are in an intense domestic modernization cycle, and additive manufacturing has transitioned from “prototyping novelty” to mission-critical production technology for multi-axis geometries CNC milling cannot reproduce. Velo3D recently secured a $9.8 million multi-year IDIQ DoD contract supporting the Defense Logistics Agency’s JAMA program for AM sustainment parts. | Demand for domestic, certified metal-AM capacity is structurally rising — driven by reshoring policy, defense procurement, and the broader “Wall Street buying the final frontier” rotation into space and defense infrastructure stocks. Velo3D’s support-free large-format printing is a genuine technical differentiator in this category. |
| Recapitalized balance sheet | On April 27, Velo3D closed a $50 million registered direct equity offering, paired with debt conversion that took total debt down roughly 70% to ~$9 million. The company has also filed for a $100 million ATM equity program and a $63 million shelf — providing significant funding runway. Q1 backlog stood at ~$30 million. | The immediate bankruptcy concerns that drove VELO’s 2024 delisting are now off the table. The company has the cash to execute on capacity expansion and ride out the path to positive EBITDA — though traders should note the ATM program means ongoing dilution risk into rallies. |
| Analyst coverage | Coverage is limited (typical for a recently relisted microcap). Among the 4 analysts covering VELO, the average 12-month price target sits at $21.00 (high: $25.00, low: $18.00) — below current levels and reflecting fundamental valuation rather than momentum. Lake Street reiterated Buy and raised its target to $20 (from $18) post-Q1 on May 13. | The technical setup here is running ahead of analyst coverage — common for early-stage turnaround stories and SpaceX-proxy momentum names where chart leads estimate revisions. Traders should treat this as a chart-and-catalyst trade, not a consensus-following one, and size accordingly. |
| Market conviction signal | The breakout came on ~16.86 million shares — well above the recent daily average — and pushed VELO up +35% in a single session. On June 5, Defiance also launched VELL, the first daily 2X long ETF tied directly to Velo3D, drawing dedicated leveraged capital into the name and amplifying directional flow. | A standalone leveraged ETF on a single microcap is rare — and when it lands alongside a high-volume channel breakout, the structural demand picture changes. The VELL ETF will mechanically push buying into VELO on up days, reinforcing the trend. |
| Upcoming triggers | Traders are watching the Q2 2026 earnings release tentatively scheduled for mid-August (where the market will demand proof of the positive-EBITDA trajectory), Aurelia partnership qualification milestones, additional defense/space contract wins, and any SpaceX IPO timing updates that drive proxy-trade flow. | A staggered set of high-conviction catalysts — earnings, defense awards, partnership milestones, and the gravitational pull of the SpaceX IPO — each capable of independently moving the stock through the back half of 2026. |
If needed, swipe or scroll sideways to view the full table.
Put it all together, and VELO is looking less like the near-bankrupt OTC reject it was 18 months ago and more like a recapitalized, deeply integrated SpaceX supply-chain franchise with credible margin inflection, a fortified balance sheet, and the most powerful retail-and-institutional narrative on the board right now.
The story is getting stronger by the week, but the chart is what could determine whether this move has more room to run in the near term. Here are the bullish technical signals traders should be watching now.
Bullish Technical Signals
#1 Trend Channel Breakout: VELO had been respecting a well-defined ascending channel over the past several months (marked in purple on the daily chart). In the latest session, price surged decisively through the upper boundary of that channel on significantly elevated volume — 16.86 million shares, well above the recent average. A channel breakout on high volume is meaningful because it signals that demand has overwhelmed the supply ceiling that previously capped rallies. This shifts the structure from “orderly uptrend” to “potential acceleration phase.”
VELO – Daily Chart
#2 Price above MAs: VELO is trading at $30.61, roughly 89% above its 50-day SMA ($16.24) and 181% above its 200-day SMA ($10.88) — placing it firmly in bullish territory on the daily timeframe. Crucially, the 50-day SMA sits above the 200-day SMA, confirming a structurally bullish alignment where intermediate momentum leads long-term momentum. These moving averages now serve as layered dynamic support on any pullback, giving buyers clearly defined levels to lean on should the stock consolidate after this breakout.
#3 MACD Above Signal Line: On the daily chart, the MACD line (light blue) has crossed above the signal line (orange) and both are trending higher — a textbook bullish crossover. This tells us that short-term price momentum is accelerating relative to longer-term momentum. The histogram is expanding in positive territory, reinforcing that buying pressure isn’t just present — it’s intensifying. When a MACD crossover aligns with a price breakout (as it does here), it adds a layer of confirmation that the move has genuine momentum behind it rather than being a false break.
#4 Bullish ADX: The ADX/DI configuration is flashing a high-conviction signal. The +DI line sits above the –DI line, confirming buyers are controlling the trend direction. More importantly, the ADX line itself (41.54) has risen sharply from below the –DI line and is now approaching the +DI line — a pattern that typically marks the emergence or acceleration of a new trend. An ADX reading above 25 generally indicates a trending market; above 40 signals a strong trend in motion. VELO checks that box convincingly.
#5 Above Support Area: Zooming out to the weekly chart, VELO has launched off a well-tested horizontal support zone (marked with the pink dotted line) that has acted as a floor on multiple occasions. Price is now trading well above its 50-week SMA ($10.49), confirming that the broader trend has shifted in the bulls’ favor. The weekly chart context is important here — it tells us this isn’t just a daily-timeframe pop; the move has structural backing from a higher timeframe, which increases the durability of the breakout.
VELO – Weekly Chart
#6 Bullish Aroon: The Aroon indicator is in a decisively bullish configuration: Aroon Up (orange) reads 100%, while Aroon Down (blue) sits at 28.57%. An Aroon Up at 100% means the stock just printed a new high within the 14-period lookback window — the strongest possible reading. Meanwhile, Aroon Down below 30% tells us sellers have been absent for an extended stretch. This combination reflects a market where buyers are consistently pushing to new highs with virtually no selling-side resistance.
#7 RSI Above 50 and Rising: The weekly RSI is above the 50 midline and is trending higher — a two-part bullish read. First, crossing and holding above the 50 midline confirms that buying momentum structurally outweighs selling pressure on the higher timeframe. Second, the continued upward trajectory rules out a stalling or distribution signal — momentum is building, not plateauing. Notably, the RSI still has ample room before reaching overbought territory, suggesting this uptrend has runway ahead before exhaustion becomes a concern.
Risks to Consider
Even strong setups can fail, especially in a speculative, momentum-driven microcap aerospace-tech name like Velo3D. This is a high-risk-reward trade, and a few things could knock the stock off course:
- A breakdown back below the ascending channel breakout level on heavy volume
- Negative company-specific news or broader market weakness that pressures speculative space and defense-tech names
- SpaceX IPO “sell-the-news” risk — once SPCX actually lists, traders may rotate directly into SpaceX shares and drain the proxy bid out of VELO
- Significant dilution risk from the $100 million ATM equity program and $63 million shelf — management is highly likely to sell shares into the current rally to fund operations
- Continued unprofitability — VELO posted an adjusted EBITDA loss of $3.6 million in Q1, and the entire thesis hinges on hitting management’s H2 2026 positive-EBITDA target
- Customer concentration risk — heavy revenue dependence on SpaceX, Honeywell, and a small pool of defense contractors; any pullback in their capital spending or in-housing of 3D printing would hit Velo3D hard
- Valuation premium — VELO is trading at roughly $30.61, materially above the 4-analyst average price target of $21.00, leaving it exposed to mean-reversion if catalysts cool
- Direct competition from EOS, Nikon SLM Solutions, and other entrenched metal-AM players, plus the risk of large customers like SpaceX gradually internalizing additive capabilities
The Bottom Line
VELO is breaking out of a multi-month ascending channel on the daily chart while launching cleanly off a resistance-turned-support level on the weekly — a dual-timeframe technical setup that historically signals the start of a sustained move higher.
The fundamental story underneath the chart is just as strong: a credible Q1 turnaround with +48% YoY revenue growth and gross margins flipping positive, a recapitalized balance sheet with debt down ~70%, and a 35% single-session breakout on the highest volume of the year.
Combine that with multiple commercial and structural catalysts staggered through year-end — Q2 earnings, the path to positive EBITDA, the Aurelia partnership rollout, ongoing defense contract wins, and the gravitational pull of the SpaceX IPO — and VELO looks like one of the more compelling momentum-driven risk-reward setups on the board right now.
If this is a trade you want to get in on, here’s how we’d play it. Below you’ll find our exact entry level, both price targets that imply 51%–92% potential upside, and the stop-loss we’re using to manage the downside.
Recommended Trade Setup
| Item | Detail |
|---|---|
| Buy Level | Above approximately $33.80 |
| Price Target 1 | $51.00 — Potential upside: 51% |
| Price Target 2 | $65.00 — Potential upside: 92% |
| Timeframe | Next 3–6 months |
| Stop-Loss | $24.00 on a closing basis |
| Trade Invalidation | Void if price hits stop-loss before entry triggers |
If needed, swipe or scroll sideways to view the full table.
For a risk of approximately $9.80 per share, the target rewards are about $17.20 and $31.20 per share. That makes this roughly a 1:2 and 1:3 risk-reward trade. In other words, the setup offers nearly 2x to 3x more potential upside than downside.
Note on Trade Invalidation: This recommendation stays active as long as the technical structure holds. If VELO drops to or below the $24.00 stop-loss before the $33.80 entry triggers, the trade is automatically void — the support underpinning the thesis would have broken, and the risk-reward setup would no longer justify entry.
Happy Trading!
Tara and Greg