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In a volatile trading environment post-Trump election, the market landscape has been characterized by strong uptrends in specific sectors, notably technology and cryptocurrency. Over the past few days, we’ve seen extraordinary movement in key stocks, with Tesla and Bitcoin emerging as focal points. However, today brings a notable pullback, hinting that recent gains may take a breather. Our pre-market analysis aims to parse through the noise, using the StoryTrading four-pillar framework—⚡️Catalysts, ❤️Sentiment, 📊Fundamentals, and 📈Technicals—to help investors position themselves for potential market shifts.

Macro Review

Global markets have witnessed heightened risk-on activity, spurred by sentiment surrounding Trump's election victory. Key players like Tesla have seen daily price targets achieved and, at times, surpassed, while Bitcoin has flirted with historic highs, nearly touching the pivotal $90,000 mark. However, this morning’s downturn raises questions about the sustainability of the Trump-driven rally. As such, cautious optimism is advisable. With fund managers and institutions heavily buying into high-performing assets, some rebalancing may be on the horizon. Protecting capital and reducing short-term call exposure could be prudent for investors while continuing to leverage longer-term momentum.

Top Picks of the Day:

AST SpaceMobile (ASTS)

• ⚡️Catalyst: ASTS is entering the spotlight as the company approaches its earnings announcement later this week, bolstered by a recent shift in investor sentiment. A minor catalyst came from a competitor's satellite re-entry, offering ASTS a competitive advantage.
• ❤️Sentiment: Previously pressured by the “Trump effect,” which had investors favoring competitors like Starlink, ASTS now sees reversed sentiment as attention shifts back. With a reversion in Trump-related trades, there is potential for renewed interest in ASTS’s growth prospects.
• 📊Fundamentals: ASTS has been showing steady improvements, and the upcoming earnings report could serve as a significant turning point if results impress.
• 📈Technicals: After a period of consolidation, ASTS’s RSI indicates an oversold condition, suggesting a possible upward trajectory in the near term. Look for a breakout towards $27–$29 before Thursday’s earnings.

Red Cat Holdings (RCAT)

• ⚡️Catalyst: Market optimism surrounding RCAT has been fueled by potential upcoming contracts. Although not officially announced, anticipation of these deals has already set a bullish tone.
• ❤️Sentiment: With enthusiasm buoyed by Trump’s win, sectors tied to risk assets and innovation have received renewed attention. RCAT exemplifies this trend, as its potential contracts could align well with a favorable policy landscape.
• 📊Fundamentals: RCAT’s fundamentals are strong in the context of its growth trajectory. Investors are keeping an eye on a possible contract announcement to solidify this outlook.
• 📈Technicals: Testing recent highs at $3.94, RCAT has room to push through, potentially achieving new all-time highs. Watch closely for any upward momentum fueled by announcements or positive sentiment.

PowerFleet (AIOT)

• ⚡️Catalyst: AIOT reported a surprising top and bottom-line beat, including a profitability milestone against analyst expectations for a loss. This unexpected profitability is a major bullish catalyst.
• ❤️Sentiment: As AIOT shifts from speculative to profitable, the company has earned a new layer of credibility with investors, particularly in a market hungry for growth stocks.
• 📊Fundamentals: With revenue growth and surprise profitability, AIOT’s fundamentals now suggest a sustainable investment, particularly appealing to those focused on long-term value.
• 📈Technicals: Opening around $5.00, AIOT offers an attractive entry point. Look for continuation above $5.40 as a confirmation of strength, positioning it well for further gains.

Tesla (TSLA)

• ⚡️Catalyst: Following Trump’s win, Tesla has been on a streak, consistently meeting our daily price targets. Today’s dip provides a new buying opportunity.
• ❤️Sentiment: Tesla remains a market darling, benefiting from fund managers piling in post-Trump. Investor sentiment remains overwhelmingly bullish, with most seeing Tesla as a core holding.
• 📊Fundamentals: Long-term fundamentals remain robust. Tesla is positioned to benefit from policy tailwinds, with innovation and expansion sustaining its growth trajectory.
• 📈Technicals: After recently hitting a high of $365, today’s correction opens up day trading possibilities. Swing targets remain at $384 and $415 for longer-term traders, with $360 acting as near-term resistance.

Square (SQ)

• ⚡️Catalyst: Square’s resurgence parallels the broader risk-on sentiment. The stock’s weekly chart aligns with the ARKK fund, highlighting a renewed interest in innovative, high-growth names.
• ❤️Sentiment: With favorable market sentiment and echoes of 2021’s risk-on environment, Square is well-positioned to attract further interest from growth investors.
• 📊Fundamentals: Square’s fundamentals are compelling as the company continues to expand its reach in digital payments and financial technology, holding significant upside as the “risk asset” rally unfolds.
• 📈Technicals: Technical indicators suggest a path toward $110 within the coming weeks. A breakout above current levels would signal a robust continuation of its recent trend.

CoreCivic (CXW) and The GEO Group (GEO)

• ⚡️Catalyst: With immigration policies likely to be a key focus of the new administration, companies like CXW and GEO are positioned to benefit from increased government contracts.
• ❤️Sentiment: Sentiment surrounding these stocks reflects the previous post-election rally in 2016 when they saw considerable gains.
• 📊Fundamentals: Both stocks have demonstrated resilient fundamentals, but the anticipated policy changes may bolster their outlook even further.
• 📈Technicals: While not day trades, CXW and GEO offer appealing swing opportunities. Expect resistance near their previous highs, though the stocks may have room for sustained growth if sentiment holds.

Honorable Mention: Amazon (AMZN)

• ⚡️Catalyst: Amazon’s recent moves to enter the AI chip market, potentially positioning it as a competitor to NVIDIA, could drive long-term growth.
• ❤️Sentiment: Market sentiment around Amazon’s strategic shift suggests potential for increased revenue streams.
• 📊Fundamentals: Though Amazon’s fundamentals are solid, its move into AI could enhance profitability if the company successfully captures market share.
• 📈Technicals: Amazon’s pre-market action suggests a favorable setup. A breakout at open could provide strong upside momentum, though we await confirmation of a stable trend.

Conclusion

In a period of rapid market shifts, today’s pre-market analysis highlights stocks with promising setups for both swing trades and long-term positions. For those looking to navigate this landscape with deeper insights, our StoryTrading Discord community provides daily live trading sessions, pre-market prep, and ongoing discussions about today’s top picks. Join us at StoryTrading Discord to stay updated and explore the potential of our four-pillar strategy in real-time market conditions.

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