How a Peace Deal Could Fuel the Market?
The stock market has begun flashing consolidation signals over the last two weeks.
The first warning arrived last week when the $S&P 500(.SPX)$ printed a shooting star on the weekly timeframe, while the $NASDAQ(.IXIC)$ posted indecisive candles just above essential resistance lines. This past Friday, the indices followed up by printing indecisive price action at overbought conditions in the case of the $Dow Jones(.DJI)$ This type of indecisive price action suggests that a consolidation phase lies ahead. Ultimately, this has been an exceptionally powerful rally, but now the market must digest its recent gains.
At the same time, we are seeing breaking positive news over the weekend regarding a potential peace deal between the United States and Iran. To navigate these developments, today’s analysis will focus heavily on technical conditions and our central weekly levels, which we always use as our primary structural tool to validate market direction: remaining above these levels confirms valid bullish momentum, while breaking below them shifts the bias to bearish momentum. While several structural charts are signaling near-term exhaustion and a healthy consolidation ahead, we will use the levels for the week ahead to objectively validate these technical signals. Our primary focus is to blend the potential geopolitical good news with strict price criteria, identifying the exact levels that must be maintained or recovered to ensure a sustainable bullish extension.
Different conditions and opportunities in our watchlist
The core question for this week centers on the flip of relative weakness: assets like $NVIDIA(NVDA)$ $Broadcom(AVGO)$ $Microsoft(MSFT)$ $Alphabet(GOOG)$ are already showing vulnerability relative to their support and resistance levels, not to mention $Costco(COST)$ $Wal-Mart(WMT)$. They serve as case studies for the upcoming sessions. If a peace-deal rally takes hold on Tuesday, will the upward momentum be powerful enough to help these specific names recover their lost structural levels? Will the potential deal fuel stocks like $Meta Platforms, Inc.(META)$ $Palantir Technologies Inc.(PLTR)$ $Netflix(NFLX)$ $Visa(V)$ $Berkshire Hathaway(BRK.B)$ that are showing constructive price action, forming a potential bullish reversal? And lastly, will the news keep $Exxon Mobil(XOM)$ below its momentum line, or is it a potential long if the deal reverses?
Meanwhile, for the securities that are showing exhaustion signals yet to be confirmed and are likely to open above their central weekly levels ( $S&P 500(.SPX)$ $NASDAQ 100(NDX)$ $SPDR Dow Jones Industrial Average ETF Trust(DIA)$ $Apple(AAPL)$ $Amazon.com(AMZN)$ $iShares Russell 2000 ETF(IWM)$ $VanEck Semiconductor ETF(SMH)$), the specific lines they must defend are referenced in the charts below with their upside targets resting above the central weekly level. Those upside targets are watch out zones, since technical indicators provide advance warnings that, sooner or later, play out in the price action when a target rejects the price and central levels are lost.
$Tesla Motors(TSLA)$ $Eli Lilly(LLY)$ $JPMorgan Chase(JPM)$ BTC are in a different cluster of securities that are worth studying for both traders and long term investors.
Today, we will break down the precise conditions for each security, highlighting the essential price levels that must hold to maintain a bullish posture, as well as the key levels that lagging assets need to reclaim. As an early indicator, Bitcoin is already reacting constructively to the headlines. Serving as a 24/7 thermometer for risk-on appetite.
Every asset features unique technical conditions and specific price levels that are analyzed individually using charts and key data points. This gives you a comprehensive view of both bullish and bearish opportunities, all consolidated into a single blueprint or dashboard to help you make informed decisions with clear targets and risk management levels.
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