🚨 Trade Updates: HOOD & AAOI
Robinhood Markets Inc. (NASDAQ: HOOD) — PT1 Hit: We recommended HOOD on May 29, 2026, with a buy level of $86.10 and price targets of $107.00 (PT1) and $123.00 (PT2). The stock has since rallied to touch PT1 — crossing an intraday high of $110.73 before closing at $105.20 Wednesday — delivering gains of approximately 24% from entry. HOOD also reclaimed its 200-day SMA ($102.75) on strong volume during Wednesday’s session, reinforcing the bullish case for a continued move toward PT2.
How to manage the position from here: Conservative traders may consider booking profits at current levels with PT1 achieved. Those looking to capture the remaining upside toward PT2 ($123.00) can continue holding with a trailing stop at $94.00 — locking in a minimum gain of roughly 9% while leaving room for the trend to develop.
📋 Trade Closed: AAOI — Stop-Loss Triggered
Our Applied Optoelectronics (NASDAQ: AAOI) recommendation from June 16, 2026, has been stopped out. The stock triggered our $195.20 entry but reversed and closed below the $181.00 stop-loss within the same session — a contained loss of approximately 7%. The symmetrical triangle pattern that underpinned the setup failed to hold, and selling pressure has since pushed shares to around $167.34.
Bottom line: A textbook reminder of why pre-defined stop-losses exist — losses contained, capital preserved, and ready to redeploy on the next high-conviction setup. And now, on to today’s featured trade…
We flagged The Charles Schwab Corporation (NYSE: SCHW) in our breakout watchlist this past Sunday — and the stock has since broken out of a multi-month falling wedge and looks headed even higher.
As we’ll get to just ahead, the combination of record-breaking May client metrics with $49.9 billion in net new assets, a strong Q1 earnings beat alongside a dividend hike, and a fresh technical breakout makes SCHW one of the more interesting setups on the board. Here’s what’s going on…
The Themes Behind the Move
Charles Schwab is one of America’s largest financial services franchises — a savings-and-loan holding company that provides wealth management, brokerage, banking, asset management, custody, and financial advisory services to retail investors, registered investment advisors, and institutions across the U.S. and internationally.
In plain English, when an everyday investor opens a brokerage account, when a financial advisor needs a custodian for their clients’ assets, or when a retiree rolls over a 401(k) into an IRA, Schwab is one of the very few firms in the world that can serve all of them under one roof. Its business hinges on the steady inflow of new client assets, net interest income from its banking operations, and asset management and advisory fees that scale with market values.
SCHW’s latest move reflects a powerful confluence of developments — commercial, operational, and strategic — that have come together in rapid succession to fundamentally reframe the company’s near-term growth trajectory.
| Theme / Catalyst | What Happened | Why Traders Care |
|---|---|---|
| Record May client metrics | In mid-June, Schwab released its May 2026 activity report, with core net new assets hitting a record $49.9 billion (+43% YoY), total client assets of $13.14 trillion (+27% YoY), and 461,000 new brokerage accounts (+37% YoY). | This proves Schwab’s asset-gathering machine is accelerating, not stalling — shrugging off fears of retail investor fatigue. Crossing $13 trillion gives the firm multiple ways to monetize: advisory fees, net interest income, and trading flow all scale with this base. |
| Q1 earnings beat + dividend hike | Schwab reported a massive Q1 2026 earnings beat: revenue of ~$6.5 billion (+16% YoY) and adjusted EPS of $1.43 (+38% YoY, beating the $1.42 consensus). Management also raised the quarterly dividend to $0.32 per share. | The earnings beat alongside a dividend increase signals management’s confidence in forward cash flows and operating leverage. It also effectively quiets lingering concerns from the 2023 regional banking crisis about Schwab’s balance sheet stability. |
| Sector tailwinds | Record highs in the S&P 500 and Nasdaq directly lift Schwab’s asset management and administration fees, which are tied to client portfolio values. Broader wealth-management tailwinds — equity market appreciation, the secular shift of assets to advice platforms, and the multi-decade generational wealth transfer — continue to underpin organic growth. | Demand for trusted, full-service wealth management is structurally rising. SCHW’s scale — $13T in assets, deeply embedded RIA relationships, and a diversified revenue mix — positions it as a clear beneficiary of these multi-year tailwinds. |
| Strengthened balance sheet | Schwab raised $2.2 billion via senior notes in May, and on June 1, 2026 redeemed all outstanding Series I preferred shares (4.000% Fixed-Rate Reset Non-Cumulative Perpetual). | Retiring preferred equity reduces dividend obligations and signals a robust, highly liquid balance sheet — Schwab is actively optimizing its capital structure for a “higher-for-longer” rate environment, not playing defense. |
| Analyst coverage | Among the 21 analysts covering SCHW, the average 12-month price target sits at $116.00, with a high of $137.00 and a low of $91.00 — implying roughly 23% upside to the mean and as much as 45% upside on the high end from recent levels. Multiple price-target increases have landed in recent weeks, with analysts citing raised 2026 revenue outlooks and emerging AI/strategy growth levers. | Even after the breakout, both the mean and high-end targets sit well above current levels, and the steady drumbeat of fresh upgrades suggests Wall Street is racing to catch up to Schwab’s improving fundamentals. |
| Strategic differentiation | Schwab announced fee cuts on four equity index ETFs (effective June 11), launched its first 24/7 product (select crypto futures on thinkorswim), and expanded fractional trading to most U.S. stocks and ETFs with a $1 minimum. CEO emphasized focus on the core client experience over speculative offerings like meme coins or prediction markets. | Improves competitiveness and client retention without chasing fintech fads. The deliberate differentiation from more speculative peers reinforces long-term brand strength — a moat that’s harder to disrupt than headline-grabbing product launches. |
| Upcoming triggers | Traders are watching Q2 2026 earnings around July 17 — key for inflows, margins, and updated guidance — followed by mid-July June monthly activity data (which, if it echoes May’s blockbuster, could trigger another leg higher), continued ETF and platform enhancements, and ongoing capital return updates. | A staggered set of high-conviction catalysts — earnings, monthly inflow data, and capital management updates — each of which can independently move the stock through the back half of 2026. |
If needed, swipe or scroll sideways to view the full table.
Put it all together, and SCHW is looking less like a slow-moving financial incumbent and more like a commercially accelerating wealth-management franchise with record inflows, expanding margins, and a fortified balance sheet underwriting the next leg of growth.
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 Falling Wedge Pattern Breakout: SCHW spent several weeks compressing inside a falling wedge — a pattern defined by converging downward-sloping trendlines (marked in purple on the daily chart). This structure reflects gradually weakening selling pressure, as each successive low attracts buyers at higher relative levels. The stock has now broken decisively above the upper boundary of the wedge. Falling wedge breakouts are inherently bullish: they signal the final capitulation of sellers and a handoff of control to buyers. Historically, these breakouts tend to produce sharp initial moves as sidelined participants chase the reversal.
SCHW – Daily Chart
#2 Price above MA: SCHW is trading above its 50-day SMA ($91.01), confirming short-term trend direction has shifted in favor of the bulls. This moving average frequently acts as dynamic support during developing uptrends — as long as price holds above it, dips are more likely to attract buyers than trigger further selling. The reclaim of this level adds a structural floor beneath the current breakout.
#3 Bullish ADX: The ADX setup is constructive on two fronts. First, the +DI has crossed above the –DI, confirming that buying pressure is now dominant over selling pressure. Second, the ADX line itself is rising from below both DI lines — a textbook signal that a new trend is not only forming but accelerating. Because ADX measures trend strength irrespective of direction, this upturn from a previously low, flat base is especially telling: it suggests the breakout is in its early innings, with momentum still building rather than approaching exhaustion.
#4 Bullish Aroon: The Aroon indicator is flashing a clean bullish signal: Aroon Up (orange) sits above 70 while Aroon Down (blue) has dropped below 30. This configuration means the stock is consistently printing new highs within the lookback period while new lows have become distant. In practical terms, buyers are active and engaged while sellers have gone quiet — exactly the kind of one-sided participation profile you want to see confirming a fresh trend.
#5 Flag Pattern Breakout: Zooming out to the weekly chart, SCHW has completed a textbook bull flag — a sharp prior rally followed by a period of orderly, downward-sloping consolidation within a narrow parallel channel (marked in pink). Price has now broken above the upper boundary of that channel. Flags are continuation patterns by design: the consolidation phase digests the prior move, shakes out weak hands, and resets momentum indicators before the next leg higher. With the stock also trading well above the 200-week SMA ($76.03), the longer-term trend remains firmly intact. This weekly structure aligns with and reinforces the daily signals, creating a multi-timeframe bullish thesis.
SCHW – Weekly Chart
#6 Bullish Stochastic: On the weekly chart, the %K line (blue) has crossed above the %D line (orange) while both were emerging from oversold territory. This is one of the higher-conviction signals the stochastic oscillator can produce — a crossover alone suggests shifting momentum, but when it occurs near the lower bound, it implies that selling pressure has been fully exhausted and fresh buying is stepping in. The fact that both lines are now trending higher confirms this isn’t a false flicker but a sustained momentum shift, supporting a longer-term buy case.
#7 Bullish RSI: The weekly RSI sits above the 50 midline and is trending higher. The 50 level serves as the dividing line between net bullish and net bearish momentum — trading above it means buying pressure is outweighing selling pressure on a sustained basis. More importantly, the direction matters: a rising RSI above 50 indicates momentum is actively gaining strength, not simply drifting. This is consistent with the early-to-mid stage of a developing uptrend rather than a late-cycle move.
Risks to Consider
Even strong setups can fail, especially in a rate-sensitive financial name like Charles Schwab. A few things could knock the stock off course:
- A breakdown back below the falling wedge breakout level on heavy volume
- Negative company-specific news or broader market weakness that pressures financials and wealth-management names
- Interest-rate sensitivity — lower rates could compress net interest margin, a key revenue driver, while a “higher-for-longer” stance keeps deposit costs elevated and caps banking-segment profitability
- Lingering “cash sorting” pressure — clients continuing to move uninvested sweep cash into higher-yielding money market funds compresses NIM, though the pace appears to be stabilizing
- Competition from low-cost players like Robinhood and Fidelity, plus emerging fintech disruptors targeting Schwab’s retail base
- AI disruption risk — earlier in 2026, the stock briefly sold off 7% when competitors launched aggressive AI-powered tax and wealth-planning tools, raising fears that AI could commoditize premium advisory services
- Valuation premium — SCHW already trades at a premium to some financial peers, leaving it exposed to multiple compression if growth disappoints
- Regulatory and macro risk tied to brokerage and banking oversight, plus broader market volatility that could slow inflows or trading volumes
The Bottom Line
SCHW is breaking out of a multi-month falling wedge on the daily chart while completing a textbook bull flag 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 record $49.9 billion in May net new assets, a Q1 EPS beat with 38% YoY growth and a dividend hike, and $13.14 trillion in total client assets.
Combine that with multiple commercial and operational catalysts staggered through year-end — Q2 earnings, monthly inflow data, platform enhancements, and ongoing capital management — and SCHW looks like one of the more compelling 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 8%–14% potential upside, and the stop-loss we’re using to manage the downside.
Recommended Trade Setup
| Item | Detail |
|---|---|
| Buy Level | Above approximately $95.00 |
| Price Target 1 | $103.00 — Potential upside: 8% |
| Price Target 2 | $108.00 — Potential upside: 14% |
| Timeframe | Next 3–6 months |
| Stop-Loss | $90.80 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 $4.20 per share, the target rewards are about $8.00 and $13.00 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 SCHW drops to or below the $90.80 stop-loss before the $95.00 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