Market Faces Double-Top Test Awaiting a Breakout Catalyst, but 5 Stocks Show Bullish Technical Signals with Unusual Call Bets

The stock market recovered most of its losses as Trump’s alternating escalation and downplay of U.S.-China tensions kept investors on edge. However, the market has yet to break above its previous high, awaiting a stronger catalyst to confirm the bullish trend—or risk forming a double top that could trigger a pullback. Sentiment remains mixed as traders look for more clues. The ongoing government shutdown, Tesla’s earnings, and Friday’s CPI release could all add uncertainty. Still, five tech stocks are showing strong bullish technical signals with unusual call option activity this week, making them attractive short-term opportunities.

Markets cheered remarks from White House economic adviser Kevin Hassett suggesting the shutdown might end soon. However, the Senate again failed to secure enough votes to reopen the government on late Monday. Technically, both the S&P 500 and Nasdaq 100 remain slightly below their October 10 highs, testing the critical double-top resistance. If the bullish momentum strengthens enough to push stocks to new highs, more investors could join the rally. But failure to break this key resistance could lead to near-term consolidation.

Tesla’s upcoming earnings could be another pivotal factor. Stronger-than-expected Q3 deliveries suggest that the negative impact of Musk’s bad reputation on sales has faded, but investors will focus on his guidance regarding FSD and Optimus—specifically how autonomous driving could power Tesla’s next phase of growth. Friday’s delayed CPI report is unlikely to bring major surprises, as Trump’s tariffs are largely priced in and Powell appears ready to cut rates next week. Investors are bracing for potential volatility, with Microsoft, Google, Meta, Apple, and Amazon set to report earnings sequentially. These fundamentals could ultimately determine the market’s direction.

This week feels more like an appetizer before a potential “earthquake.” We’ve identified five tech stocks that could outperform in the short term, supported by strong technical setups and aggressive call option activity.

Shopify (SHOP) shares are forming a classic bullish pattern with higher lows and higher highs. The MA(3) is breaking above the MA(7,10), reinforcing the uptrend. Traders have accumulated over 1,000 call options at $165, $167.5, and $170 expiring this Friday. The partnership between Shopify and OpenAI highlights AI-driven e-commerce potential, which could trigger a new growth cycle and strengthen its competitive position against Amazon.

Alibaba (BABA) has rebounded from its recent correction following the AI-driven rally and appears poised to resume its uptrend after consolidation. The MA(3) is attempting to break above the MA(7,10), while traders have placed over 13K+ call bets at $180 expiring this Friday—triple the volume of at-the-money options. The strong demand for the iPhone 17 in China signals a recovery in consumer spending, which could benefit Alibaba as domestic consumption rebounds.

Meta (META) has bounced from a double-bottom pattern, with the MA(3) crossing above the MA(7,10), indicating a bullish setup. Traders have built large call positions, with 7,664 contracts open for the $750 out-of-the-money call expiring Friday—the highest among the week’s expirations. Meta’s renewed focus on AI-driven social media and the strong response to its new AR glasses offer promising growth paths, making it an appealing entry point.

Snowflake (SNOW) also shows a strong higher-low, higher-high formation. The data cloud platform’s partnerships with Nvidia, Microsoft, OpenAI, and Palantir suggest significant growth potential from current valuations. Traders have opened more than 3,000 call contracts at $250 and $260 expiring this Friday, betting on a breakout.

Amazon (AMZN) has shown impressive resilience despite recent AWS outages, with shares holding firm near key support and potentially forming a double-bottom base. The stock remains fundamentally strong despite competition from Microsoft and Google and concerns over Trump’s tariff policy. Traders have aggressively accumulated more than 80K call contracts across the $220, $225, $230, and $235 strikes expiring Friday, anticipating a continuation of the rally as technicals turn favorable.