2026 Momentum Stock Watchlist + Covered Calls: A Practical Plan for Passive Income and Retirement Income
It’s January 6, and this is the time of year when investors get tempted to make bold calls.
“This is the stock for the year.”
“This sector will definitely win.”
“This one can’t lose.”
That’s not the game here.
This is about probabilities, not prophecies.
If you’re serious about Investing with a process—especially one that can generate Passive Income and support Retirement Income—you need a repeatable framework. One that tells you what to watch, when to enter, when to exit, and how to avoid the brutal mistakes that blow up portfolios.
The watchlist below is built on one simple idea: stocks with momentum often carry into the new year—until they don’t. That’s why risk management matters more than the “story.”
And when stocks don’t move (because they consolidate for months), Covered Calls can turn “dead money” into usable cash flow.
The Core Idea: Momentum + Fundamentals + Chart Structure
The goal isn’t to “buy the bottom.”
The goal is to identify stocks that are already showing strength and are setting up in recognizable patterns—then manage risk like a professional.
Here’s the quick filter used throughout this framework:
- Earnings per share growth (future expectations drive price)
- Sales growth (confirmation the business is expanding)
- High return on equity (quality and efficiency)
- Strong chart patterns (bases, breakouts, consolidations)
- Liquid volume (important for clean entries and option execution)
This is not a buy-and-hold philosophy. It’s a system-based approach.
2026 Momentum Watchlist: Stocks on the Radar
These aren’t recommendations. They’re a starting point for research—names showing chart strength, early-stage bases, and/or breakout attempts.
GE Aerospace (GE)
A strong chart pushing all-time highs and breaking out from a clean consolidation. The big idea: stocks at highs can go higher, especially when institutions keep stepping in.
Exelixis (EXEL)
A choppier chart than GE, but working through a cup-and-handle style setup. Early-stage bases matter because later-stage bases tend to attract profit-taking.
Howmet Aerospace (HWM)
Another aerospace name with strong structure and solid growth characteristics. The chart is near a key pivot area—exactly the kind of spot momentum traders monitor closely.
First Solar (FSLR)
Historically volatile, but now showing a different posture: improving numbers and a more constructive base. The energy theme is back in focus because AI needs data centers, and data centers need power.
Gildan Activewear (GIL)
Not the flashiest story, but that’s sometimes the point. A first-stage base near a breakout zone with decent growth. Even “boring” businesses can trend when the chart is right.
PNC Financial (PNC)
A slower mover with a long consolidation and a potential breakout attempt. Banks can be tricky during rate transitions, but the chart is what matters most.
SharkNinja (SN)
Early-stage cup-with-handle structure, but still not “there” yet. Watchlist name, not a must-act-now name.
JPMorgan Chase (JPM)
If you like banks, many traders prefer the leader. Stronger structure than most in the space, with solid fundamentals and institutional credibility.
RTX (RTX)
Another aerospace name with a strong move behind it. Not as exciting on the growth metrics, but worth tracking for pullbacks into more favorable entry areas.
Eli Lilly (LLY)
Healthcare can rotate back fast. This one is pulling back into a key moving average area and building an early-stage pattern. Watch how it behaves around support.
Nvidia (NVDA)
You can’t talk market leadership without Nvidia. Massive growth, high ROE, and a consolidation that could become an early-stage base. When this name moves, it can influence the whole index.
Nu Holdings (NU)
A financial name with strong growth characteristics and a constructive base-on-base structure. Worth monitoring if banks and fintech regain momentum.
Sandisk (Storage Theme)
Storage led last year, and this is a reminder that themes can persist longer than people expect. The chart is extremely strong (almost too strong), which means it’s also a candidate for sharp pullbacks. Strength is real—but manage risk.
Hut 8 (HUT)
A crypto-linked name with messy earnings history but strong chart behavior. These can move hard when Bitcoin sentiment shifts, which is why they’re watched—not blindly trusted.
Reddit (RDDT)
A chart that’s hard to ignore. Even if the business model feels confusing, price action reflects investor demand. Strong move, key setup area, and improving growth trajectory.
Figure Tech Solutions (FIGR)
An IPO-style base setup. These can be powerful, but also prone to being extended. Often best watched for pullbacks before acting.
Why Early-Stage Bases Matter So Much
A key theme in this approach is stage analysis.
- Stage 1 and Stage 2 bases are often where big money begins to accumulate.
- Later-stage bases can still work, but they’re more vulnerable to distribution and exhaustion.
That’s why the watchlist leans toward early-stage setups whenever possible.
Risk Management: The Rule That Keeps You in the Game
If you remember one thing, make it this:
Your first loss is your best loss.
Momentum trading without risk management is just ego with a chart.
When a stock breaks down:
- don’t rationalize
- don’t “ride it out” because you like the CEO
- don’t marry the story
Get out. You can always get back in.
This mindset is what separates disciplined Investing from expensive entertainment.
Covered Calls: Turning Consolidation Into Passive Income
Here’s where the strategy becomes more than stock picking.
Even the best stocks can consolidate for months. That’s dead money if you’re only waiting for price appreciation.
Covered Calls add an income layer.
Covered calls in plain English
- You own 100 shares of a stock.
- You sell a call option against those shares.
- You collect premium (cash) up front.
That cash can help generate Passive Income and, over time, contribute toward Retirement Income—especially if you apply it consistently to liquid, high-quality names.
Why covered calls fit momentum watchlists
A momentum watchlist naturally includes stocks that:
- break out
- pull back
- consolidate
- then attempt another move
Covered calls can potentially help you:
- get paid while the stock chops sideways
- reduce emotional decision-making
- stay disciplined instead of forcing trades
- build repeatable cash-flow habits
Yes, covered calls can cap upside if a stock explodes higher. That’s the tradeoff. The goal is not to “win the most.” The goal is to build a system that pays you.
A Simple Process You Can Use This Week
- Build a watchlist like the one above.
- Identify the pivot / breakout zone and key moving averages.
- Wait for confirmation (or controlled pullbacks).
- Enter small and scale only when the stock proves itself.
- If it consolidates, consider covered calls to produce income.
- If it breaks down, exit quickly and preserve capital.
That’s how you turn Investing into process—rather than prediction.
Life-Improving Tips for Better Investing and Better Covered Calls
- Keep a “no predictions” rule. Think probabilities and scenarios.
- Only trade liquid names if you plan to sell covered calls.
- Focus on early-stage bases—later-stage bases are more failure-prone.
- Respect the trend: avoid buying stocks living under major moving averages.
- Write your exit rule before you enter.
- Never let one position threaten your Retirement Income plan.
- Don’t chase extended breakouts—wait for pullbacks or tight setups.
- Use covered calls to monetize consolidation instead of getting bored.
- Avoid selling calls too close to price if you want more upside participation.
- Track results weekly: entries, exits, premiums, and mistakes.
- Be willing to re-enter after a stop-out—pride is expensive.
- Remember: consistency beats brilliance in long-term Investing.
FAQs
1) Are these stocks “buys” for 2026?
No. They’re a research watchlist based on momentum and chart structure. You still need entries, exits, and risk management.
2) Why do covered calls help with passive income?
Because the option premium can generate cash flow while you hold shares—especially during long consolidations.
3) What’s the biggest risk with covered calls?
You still have downside risk from the stock, and you can cap upside if the stock rallies above your strike.
4) Can covered calls support retirement income?
They can contribute by creating repeatable premium income over time, but they require discipline, sizing, and a plan that fits your risk tolerance.
Call to Action
If you want to learn how to apply covered calls with structure—including how to choose quality stocks, pick strikes, and manage positions through consolidations and breakouts—go to our Covered Call channel:
Conclusion
A strong watchlist doesn’t guarantee a strong year.
A strong process is what gives you the chance to win.
Momentum can carry into the new year, but only disciplined Investing turns momentum into lasting results. Risk management protects you when you’re wrong. And Covered Calls can help turn uncertainty and consolidation into Passive Income, which can support bigger goals like Retirement Income.
