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📰 Macro Market Overview

The market is entering a pivotal week as major indices approach critical support levels. Small caps (IWM) have led the decline, bouncing off the 200-day moving average (DMA) at $217.50, a move anticipated based on overextended RSI levels and key small-cap breakdowns last week. However, unlike previous pullbacks, the market isn't yet fully oversold—suggesting that downside risk remains. You can watch the entire Pre-Market Prep here: Watch Now.

Meanwhile, QQQ and SPY are lagging, with tech stocks showing signs of exhaustion. QQQ, currently at an RSI of 49, still has room to test its 20-DMA ($500-$510 range) before confirming a bottom. Microsoft’s (MSFT) news on cutting AI data center leases initially pointed toward a rough open, but Dan Ives’ bullish NVIDIA (NVDA) take, along with Apple (AAPL)’s AI investment announcement, stabilized futures.

However, with NVIDIA earnings on Wednesday as a major risk event, market participants should tread carefully. Maintaining 40-60% cash allocation remains the preferred strategy for managing risk in this environment.

📊 Top Pick of the Day

WeRide Inc. (WRD)

• 🎯 Trade Strategy: Buy-the-dip opportunity
• ⚡️ Catalyst: WRD announced a major breakthrough in fully unmanned robot taxi operations in Beijing. This follows previous upside momentum linked to NVIDIA’s investment.
• ❤️ Sentiment: Positive, but market conditions will dictate the strength of continuation.
• 📊 Fundamentals: Strong AI growth sector. Expansion into China’s self-driving market aligns with increasing government support.
• 📈 Technicals: Pre-market resistance at $27.50 but a break above could signal continuation. Potential move into low/mid $30s.

Root (ROOT) 

• 🎯 Trade Strategy: Swing into earnings
• ⚡️ Catalyst: Massive pullback (-40%) ahead of earnings, despite no fundamental shift. Investors may be mispricing prior Carvana (CVNA) correlations.
• ❤️ Sentiment: Negative in the short term, but expected to rebound post-earnings.
• 📊 Fundamentals: Undervalued based on last quarter’s earnings. Potential for a major re-rating above $150 if earnings deliver.
• 📈 Technicals: $100 is a key buy level, with post-earnings targets of $150-$200.

Teladoc (TDOC) 

• 🎯 Trade Strategy: Watch post-earnings for a catalyst
• ⚡️ Catalyst: Citron hints at a turnaround. If earnings confirm, this could be an inflection play.
• ❤️ Sentiment: Mixed, given its long-term underperformance.
• 📊 Fundamentals: Still challenged by revenue concerns, but if cost-cutting and AI integration show up in earnings, it could get a major sentiment boost.
• 📈 Technicals: RSI suggests oversold conditions. $15-$20 could be a reasonable post-earnings target.

Beyond, Inc. (BYON)

• 🎯 Trade Strategy: Wait for earnings confirmation
• ⚡️ Catalyst: Hoping for major fundamental turnaround news. Will only buy if the earnings report signals an inflection point.
• ❤️ Sentiment: Still struggling, but high short interest could fuel a squeeze.
• 📊 Fundamentals: Long-term demand concerns, but any sign of turnaround could send shares flying.
• 📈 Technicals: $10 breakout post-ER would be significant. If it happens, the next stop is $30+.

📝 Final Thoughts: A Tactical Approach to This Market

With a macro setup that’s still fragile, caution is key—but there are clear opportunities. WRD leads the watchlist today with its China expansion, while $ROOT offers potential multi-day setups into earnings. $TDOC and $BYON remain wildcard plays, dependent on whether catalysts confirm.

For those looking for real-time trading ideas, risk management strategies, and a community-driven approach to trading, our Discord is where these plays are actively discussed in-depth. Join us today: https://linktr.ee/talkmarkets and use code TALKMARKETS for 50% off your first month!

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