3 signs a pullback is coming. And stocks to watch

1- A string of weaker-than-expected tech quarterly results are triggering profit-taking across the market.  We have seem profit margin compression from Tesla and Netflix — which hints at slower earnings momentum. Remember the stock market dances higher when companies upgrade their outlooks and report better-than-expected results. But now we're seeing 'disappointing' tech results from $Tesla (TSLA.US)$ $Netflix (NFLX.US)$ $IBM Corp (IBM.US)$. This means the market’s music could slow down. Now many are wondering if the trend will continue next week with $Apple (AAPL.US)$ $Microsoft (MSFT.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$'s results?  

2- At the same time, the Nasdaq 100 $NASDAQ 100 Index (.NDX.US)$ appears to have formed a double top — often a technical sign that momentum has run too hot, similar to walking on scorching sand at the beach. It’s hard to stay balanced before tripping over. The last time this pattern appeared was in January 2025, before the market fell about 24%. See below chart. There are other technical indicators such as MACD, showing momentum is cooling. Both the Nasdaq 100 and S&P 500 have lost a bit of steam, suggesting the market could be due for a breather.

3- And finally, meme stocks rallying again — a classic late-cycle signal. Speculative stocks surging typically precedes a short-term correction Beyond Meat shares have surged 455% in just three days after signing a deal with Walmart, and $Beyond Meat (BYND.US)$ was added to the Meme Stock ETF   $Roundhill Meme Stock ETF (MEME.US)$. Other speculative names, like $Krispy Kreme (DNUT.US)$ are up 25% in three days.

If mext week’s heavyweights — Apple, Amazon, Microsoft, Google, and Meta — report better-than-expected earnings, the rally in the $NASDAQ 100 Index (.NDX.US)$ could resume.  

– $Tesla (TSLA.US)$ the first company valued at over $1 trillion and the first of the “Mag-7” tech companies to report, saw its profit margins fall short of expectations even though it sold a record number of vehicles. The market didn’t like that its costs jumped 50% to $3.4 billion in the quarter, eating into its profit margin. Tesla shares fell after hours, slipping below the 20-day moving average — a sign bullish momentum is fading. Tesla shares are now down about 7% from this year’s high of $470.75.

- $Apple (AAPL.US)$. Its market cap almost hit US$4 trillion a few days ago; it’s now US$3.8 trillion. Can its shares rally if it reports better-than-expected results next week? The last few quarters, its shares have fallen after reporting results. Also note the market expects revenue to surge to $102 billion.

- $Halliburton (HAL.US)$. This is the best-performing stock on the US S&P 500 this week, up 18% — not only following a lift in oil prices but also because its quarterly revenue rose more than expected to US$5.6 billion. The narrative is shifting. Halliburton has a strong backlog of orders thanks to Trump’s “drill, baby, drill” mantra. But also as it has exposure to new growth areas. It’s inked new power-generation deals for data centers and holds a backlog of other new contracts. Analysts are upgrading the stock with a bullish outlook. UBS upgraded its price target, along with TD Cowen, increasing its price target to $38. Morgan Stanley reiterated the stock as a BUY. RBC upgraded HAL to Outperform, raising its price target. According to moomoo and market consensus, the average 12 month price target is $29.50.