The Market is at All-Time Highs: Here’s 3 Stocks I’m Watching

The market has been showing strength, and right now my overall view is simple: if you can’t beat them, join them. Eight out of the 11 S&P 500 sectors have been moving higher, and even with geopolitical concerns in the background, the market has continued to push forward. That said, I’m not blindly bullish here. With the market near all-time highs, I would call myself cautiously bullish. That means I still want to participate in strong setups, but I also want defined risk, smart entries, and clear “I’m wrong” levels.

On May 7th, 2026, I went live on Schwab Network to share my overall market thoughts and find 3 specific potential trades. 

The first stock I’m watching is Taiwan Semiconductor, ticker TSM. 

Semiconductors have been on a tear, and Taiwan Semi is one of the most important companies in the entire AI supply chain. They manufacture chips for companies like NVIDIA, Apple, and AMD, which means they do not necessarily have to create the next best AI app or software platform. They are building the chips for the companies that are powering the AI boom. Their recent numbers back up the story, with strong revenue growth, higher profitability, and growth driven by HPC, or high-performance computing. 

Technically, the chart looks like it may be forming a cup-and-handle pattern, which could point to more upside. 

For the trade, I like the idea of a bull call spread going out to December 18, 2026. The example setup would be buying the 370 call and selling the 460 call, bringing the net debit to around $42 with a break-even near $412. Since the market is near highs, I like having the spread structure instead of just being fully directional with a long call. 

My “I’m wrong” level would be if the stock breaks below the 50-day moving average.

The second stock is Baidu, ticker BIDU. 

This is a different kind of setup because it has earnings coming up, and I look at this as more of an earnings-related trade. Baidu is one of the largest Chinese internet, AI, and search companies — essentially the Google of China. Revenue declined year over year, mainly because of weakness in search advertising, but the AI side of the business is becoming a much larger part of the revenue mix. 

To me, this looks like a transition quarter. The old search business is slowing, but AI is starting to become a bigger growth driver. On the chart, the stock bounced from around the $109 level and has room to potentially move higher, but I like the trade because I believe the downside may be somewhat limited. 

The example trade here is a bull put spread. I would look at buying the 110 put and selling the 120 put, bringing in about a $1.50 credit on a $10-wide spread. That gives you a potential 15% return and creates a cushion because the stock was trading around $140 at the time. 

With this setup, you have three ways to be right: the stock can go up, stay flat, or even pull back and still potentially allow you to keep the credit.

The third stock is Honeywell, ticker HON. 

This one is not showing the same momentum as the first two, but that is exactly what makes it interesting. I usually do not want to buy stocks at all-time highs if I can find a cleaner low-risk, high-reward setup. H

oneywell has pulled back toward the bottom of a longer-term channel, and that gives me a defined area to watch. The company is involved in aerospace, defense, technology, and building automation. It is not the flashiest AI name, but there is a strong business underneath it, especially with building automation tied to data centers and hospitality. 

I like the idea that this is a more insulated company because we are not likely to outsource key aerospace, defense, and automation technology. 

For the trade, I would look at a longer-dated December 18 call option with the 200 strike. At around $30, the break-even would be near $230. If the stock simply retraces about 50% of its recent pullback, that could put the option near break-even from an intrinsic value standpoint, with potential upside if there is still time value left. 

My stop would be below the $200 stock price level, which is also slightly below the 200-day moving average.

The big lesson here is that every trade does not have to look the same. 

Taiwan Semi is a momentum-driven AI supply chain play. 

Baidu is an earnings setup with a defined-risk credit spread. 

Honeywell is a pullback trade near support with longer-term upside potential. 

The key is not just finding a stock you like — it is matching the right trade structure to the setup. That is how you give yourself a plan, manage risk, and avoid guessing. Markets will always have uncertainty, but when you know your levels, your strategy, and your “I’m wrong” point, you can trade with a lot more confidence.

DISCLAIMER

This is not trading advice. This is for educational and entertainment purposes only.

By interacting with The Brown Report LLC you are acknowledging and accepting that you alone are responsible for your own trading and investing decisions and need to do your own research independently before entering any trades or investments.