ð Wall Street Radar: Stocks to Watch Next Week
ðž Volume 25: ðŠïļ AI Market Shakeout: Is DeepSeek the Black Swan Event? ðĶĒ
The relentless equity surge extended last week with SPY closing within 0.8% of record highs. However, leadership divergences emerged as QQQ trailed by 1.2% and IWM underperformed by 3.4% â a warning sign about the rally's breadth. This vertical 5.2% SPY advance in seven sessions now faces its first major stress test: Wednesday's FOMC decision and guidance on balance sheet runoff.
While technicals favor consolidation after such parabolic momentum, fundamental catalysts could override mean-reversion patterns. The Fed's messaging on inflation stickiness and quantitative tightening timelines will likely dictate near-term volatility regimes. Concurrently, earnings from Magnificent Seven constituents â particularly cloud/AI-centric names â may amplify sector rotation as investors reprice growth trajectories.
China's launch of DeepSeek R1 has reset cost-performance benchmarks, achieving parity with OpenAI's frontier models at 95% lower inference costs. This open-source breakthrough threatens incumbent moats and could pressure valuations for hyperscalers reporting this week, here are additional details.
(please check our Market Monitor for additional information)
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T2118
The T2108 breadth indicator's surge to 64.66 confirms broadening participation in the rally, though precisely this strength now raises contrarian concerns. With the VIX compressed to 14.85 â levels last seen during January's speculative frenzy â the setup presents textbook mean-reversion risks.
While 70+ on the T2108 typically precedes 5-7% pullbacks, current momentum could test 80.00 in a blowoff scenario. Any daily close above 75.00 would trigger our systematic long liquidation protocol.
T2108
The T2108 breadth indicator climbed to 45.27 positions, squarely in neutral territory â neither oversold nor overbought â suggesting that markets have room to maneuver following last week's consolidation. However, the real story emerges in conflicting signals between short-term momentum and structural breadth health.
The 4% Bull-Bear Indicator has maintained green status for 14 consecutive sessions, its longest streak since January's rally attempt. This suggests algorithmic buyers are defending key support levels.
Neutral breadth is the market's way of demanding fundamental proof to justify valuations. Until either earnings revisions turn decisively positive or the Fed telegraphs concrete dovish pivots, assume mean-reversion remains the dominant regime.
Portfolio updates and new positions:
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Each stock on the watchlist will now have a risk grade badge next to its name, reflecting our assessment based on factors such as volatility, share float, technicals, fundamentals, ADR, and more. This badge is designed to help readers gauge the stock's risk profile, providing valuable context for making informed decisions about how to approach it.
High risk: â ïļ
Medium Risk: ð
Low Risk: ðĄïļ
ðâĻ Watchlist Essentials: Top Free Picks
HSAI: Hesai Group â ïļ
What they do: Leading provider of LiDAR solutions
Why watch? ð Demonstrating exceptional momentum following a breakthrough earnings report in late November, catalyzing a remarkable 200% rally. Currently in a healthy digestion phase, maintaining support above both 20 and 10 EMAs while consolidating under the critical $16.00 resistance level. Technical analysis suggests optimal entry potential, with a break above $16.00 potentially igniting the next leg higher. Risk management note: Monitor US-China diplomatic relations as geopolitical headwinds could impact Chinese stocks in this sector.
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DOCU: DocuSign Inc ðĄïļ
What they do: Leading electronic signature and agreement cloud solutions
Why watch? ð After a 15% post-earnings pullback in December, the stock now consolidates bullishly above converging 10/20 EMAs. A volume-backed breakout above $93 could ignite momentum, with technical alignment suggesting upside potential. Risk note: Monitor competition in digital agreement space and enterprise SaaS spending trends.
FRPT: Freshpet Inc ðĄïļ
What they do: Premium refrigerated pet food manufacturer
Why watch? ðĨŦ Developing textbook cup & handle pattern with handle formation under $159-160 resistance. While showing an impressive growth-to-profitability transition, current valuations demand caution - consider this a swing trade play targeting ATHs at $188 rather than a long-term hold. Handle completion requires 2-3 more consolidation days.
LDTC: LeddarTech Holdings Inc â ïļ
What they do: ADAS/LiDAR systems for autonomous vehicles
Why watch? ð High-risk/reward speculative play forming a falling wedge with an unusually tight candle range. Technical setup suggests $0.10 downside risk vs $0.40-0.50 upside potential. Watch for the expansion of the candle range to confirm pattern resolution.
BLDR: Builders FirstSource Inc ðĄïļ
What they do: Building materials & construction solutions
Why watch? ðïļ Completed 20% rally on strong volume, now digesting gains above recaptured moving averages. Bull flag formation suggests a $169 breakout could trigger the next leg up. Housing market trends and lumber prices remain key fundamental drivers.
GCO: Genesco Inc ð
What they do: Footwear retail & branded products
Why watch? ð Post-earnings consolidation maintains perfect alignment across daily/weekly charts. A break above $44 with volume could confirm the continuation pattern. Monitor consumer discretionary spending indicators given retail sector exposure.
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