Image Source: Pixabay

Macro Review: Navigating a Shifting Market Landscape

Markets are entering a crucial phase, grappling with conflicting economic signals that are making it increasingly difficult for traders to find clear direction. Watch our full pre-market prep discussion here: YouTube Link. The NASDAQ 100 (QQQ) found a short-term bottom in the mid-$480s after we initially projected a decline to the $500-$510 range. Our adjusted forecast pinpointed a potential bottom around $492, refining it further to the mid-$480s, which ultimately materialized on Tuesday morning at 10:30 AM. While a multi-day to multi-week bounce was anticipated, a weak ADP jobs report this morning is raising concerns about recessionary pressures and shaking market confidence.

The bond market, as represented by TLT, is responding favorably to the weak jobs data, benefiting from expectations of lower interest rates. However, small-cap stocks (IWM) remain in a precarious position. These high-risk assets thrive under a Goldilocks scenario—where interest rates decline without triggering fears of an economic slowdown. Today’s data suggests we are not yet in that environment, which could make small-cap investing particularly challenging.

The 200-day moving average (DMA) for QQQ at $491.24 and yesterday’s low of $487.74 serve as critical technical levels. If QQQ closes below the 200-DMA, it will signal a shift toward a more defensive posture, higher cash positions, and longer-term investment considerations. Traders must remain vigilant, as a breach of these levels could shift market sentiment drastically.

Top Picks 

1. AST SpaceMobile (ASTS)

⚡️ Catalysts: Groundbreaking Progress in Satellite Deployment

$ASTS continues to solidify its position as a market leader in satellite-based cellular connectivity. The company reaffirmed that it has $1 billion in cash and expects an additional $400 million in non-dilutive government funding, significantly reducing the likelihood of near-term dilution—a key concern for short-sellers. The company is targeting early Q3 for operational cash flow positivity, further strengthening its financial position.

❤️ Sentiment: Shorts Are in Trouble

Short interest remains extremely high at 44 million shares, with many traders betting on dilution. Now that ASTS has addressed these concerns, short sellers may soon be forced to cover, leading to a potential short squeeze. This sentiment shift could fuel a significant breakout.

📊 Fundamentals: Huge Growth Potential

With 20 satellites expected to be operational soon and full continuous coverage by 2026, ASTS is positioned to generate billions in revenue. Despite its $8 billion market cap, the revenue growth projections make this a highly attractive long-term play.

📈 Technicals: Breakout Levels Approaching

ASTS is pushing towards a $31-$33 resistance zone today, with a potential breakout toward $39 in the near term. The inflection point for a major move higher is imminent, and we believe this stock could be the best performer across multiple time frames—daily, weekly, and long-term.

2. OppFi (OPFI) 

⚡️ Catalysts: Strong Earnings & Oversized Short Interest

$OPFI delivered an impressive 15% earnings beat, sparking a 16% rally pre-market. With 33% short interest, this stock is primed for significant upside if momentum continues.

❤️ Sentiment: Traders Eyeing a Squeeze

The stock is facing heavy resistance, but given the short float and strong earnings, traders are positioning for a potential breakout. However, caution is warranted given broader market weakness.

📊 Fundamentals: Cheap Valuation

Despite its recent rally, $OPFI trades at a forward P/E of just 10, making it one of the cheaper names in the sector. However, sector-wide concerns about a potential recession could weigh on growth stocks, which tempers expectations for immediate upside.

📈 Technicals: Key Resistance Levels

Resistance sits around $11-$11.15, with a breakout target of $12.60. A move beyond this could open the door for a larger short squeeze, but traders should watch for consolidation around these levels.

Other Stocks on the Radar

1. Byrna Technologies (BYRN) – Pre-announced a strong revenue beat and reaffirmed plans to shift all supply chain sourcing to the U.S. While the stock trades at a rich valuation (P/E of 74, P/S of 6x), it could be attractive for long-term investors if the market stabilizes.
2. Huntington Ingalls (HII) & General Dynamics ($GD) – Beneficiaries of Trump’s new shipbuilding policy, both stocks are showing strength. $HII, in particular, could see sustained upside as pure-play shipbuilding exposure.
3. On Holding (ONON) – Received multiple analyst upgrades, including a target hike from $62 to $66 by Morgan Stanley and $65 to $73 by UBS. Swing traders should watch for continuation toward $55, provided market conditions improve.

Final Thoughts: Stay Tactical in This Market

Market conditions remain challenging, with concerns about recessionary pressures and technical breakdowns looming over major indices. That said, opportunities still exist, particularly in stocks with strong catalysts and high short interest like ASTS and OPFI.

For those looking for real-time trade ideas, in-depth analysis, and access to a community of like-minded traders, consider joining our StoryTrading Discord. We break down the markets daily, providing actionable trade insights backed by our 4-pillar methodology.

📌 Join us today

More By This Author:

Will The Market Hold? QQQ’s Critical Test & Top Trade Ideas
Market Rebound In Sight: Crypto Strength And Key Catalysts To Watch
Market Meltdown Or Bounce Back? Here’s What Traders Need To Know