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Macro Review: A Volatile Start to 2025

As we usher in the new year, market dynamics continue to be shaped by a blend of tax-deferral selling, the January effect, and macro uncertainties. Futures pointed higher this morning, with gains between 0.5% and 1%, but seasoned traders remain cautious. The specter of early January tax-deferral selling looms, often leading to sharp pullbacks in the opening hours, as seen in past years. For a more detailed discussion, watch our pre-market prep video here.

Despite the macro overhang, pockets of opportunity exist. The January effect, characterized by renewed optimism and the unwinding of tax-loss selling from December, is in full swing. However, caution is advised, as volatility may persist until institutional investors return in full force next week.

The broader market’s resilience is underscored by the performance of QQQ, which hovers near a critical DMA support level, setting the stage for potential short squeezes if tax-deferral selling subsides. Meanwhile, Bitcoin, often a risk proxy, shows promise with a low RSI but remains below key moving averages, signaling a wait-and-see approach.

Top Picks of the Day: The 4-Pillar Breakdown

For today, StoryTrading highlights five standout swing picks that align with our four-pillar methodology: Catalysts, Sentiment, Fundamentals, and Technicals. These stocks are poised to capitalize on the January effect and broader market dynamics.

TransMedics Group (TMDX) – A January Effect Gem

⚛ Catalysts: The January effect is in play, with TransMedics Group rebounding sharply after December’s tax-loss selling. Additional momentum is driven by upcoming shareholder updates and positive sentiment surrounding the company’s growth trajectory.

❤️ Sentiment: Strong relative strength was evident on New Year’s Eve, signaling renewed investor confidence. The stock’s bullish sentiment is further bolstered by overlapping investor interest with top-performing peers like Celsius ($CELH).

📊 Fundamentals: TransMedics Group boasts robust financial metrics and a scalable business model. The stock’s ability to bounce back highlights its underlying value and investor appeal.

📈 Technicals: Currently trading above the 20 DMA, TransMedics Group’s next resistance lies near $64.96. A potential move to $79 within January makes it a compelling swing trade candidate.

Aehr Test Systems (AEHR) – Resilient and Poised for Growth

⚛ Catalysts: With earnings on the horizon (delayed due to Jimmy Carter’s funeral), Aehr. is positioned for strong performance as investors anticipate positive updates.

❤️ Sentiment: Aehr continues to exhibit relative strength, outperforming the broader market despite recent volatility. Bullish sentiment is amplified by its alignment with the January effect narrative.

📊 Fundamentals: Aehr's financial health and growth prospects remain solid. The company’s ability to deliver consistent results makes it a favorite among value-oriented investors.

📈 Technicals: The stock remains well-supported, with room to run ahead of earnings. A measured approach to scaling into positions is recommended.

GEO Group (GEO) – Riding the Inauguration Effect

⚛ Catalysts: Renewed optimism surrounding the incoming administration’s policies has reignited interest in GEO Group. The inauguration effect is expected to provide a further boost.

❤️ Sentiment: GEO Group has seen a steady increase in positive sentiment, with investors positioning for a January rally.

📊 Fundamentals: The company remains undervalued, with solid financials that support its potential for a sustained upward trajectory.

📈 Technicals: GEO Group is holding key support levels and is primed for a breakout. Monitoring volume trends will be crucial for timing entries.

Viking Therapeutics (VKTX) – Momentum in the Making

⚛ Catalysts: Recent developments, including favorable updates on its pipeline, position Viking Therapeutics as a strong contender for a January effect rally.

❤️ Sentiment: The stock has been a top performer in recent sessions, with green candles signaling robust buying interest.

📊 Fundamentals: Viking Therapeutics’ financial outlook remains compelling, with analysts highlighting its long-term growth potential.

📈 Technicals: Holding above critical moving averages, Viking Therapeutics’ bullish setup points to further gains. Resistance near recent highs will be a key level to watch.

Beyond, Inc. (BYON) – Under-the-Radar Potential

⚛ Catalysts: Recent announcements and shareholder updates have brought Beyond Air back into the spotlight, making it a top pick for speculative investors.

❤️ Sentiment: Although still flying under the radar, Beyond is gaining traction among retail and institutional players.

📊 Fundamentals: With a solid balance sheet and promising growth prospects, Beyond is well-positioned for a strong January performance.

📈 Technicals: The stock’s technical setup points to a breakout, with initial targets near its 200 DMA.

Conclusion: Navigating 2025 with StoryTrading

The new year presents a mix of challenges and opportunities. While macro uncertainties persist, targeted strategies like StoryTrading’s four-pillar approach provide clarity in an unpredictable market. Our community’s ability to identify and act on key market drivers ensures consistent outperformance.

To stay ahead of the curve and gain access to in-depth analyses and real-time trade ideas, join our vibrant Discord community. Visit https://linktr.ee/talkmarkets and use code TALKMARKETS for 50% off! Together, we’re redefining how markets are understood and traded.

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