January is historically a positive month for the stock markets and this year looks just the same. Nasdaq is leading the way with the best odds of gains this month. The Nasdaq Composite Index is set for a potential peak and the S&P 500 index might also reach its record high. The equity markets have had a good start to 2021 and the prospect of further gains looks realistic. This month, the Nasdaq Composite Index is up 11.5%, making it the best performing stock market index in January. Investors will find opportunities in the technology sector. Stocks such as Apple, Amazon and Microsoft are doing very well this month, all having gained more than 10%. Further to the technology sector, cyclical stocks such as financials have done well in January. Banks have benefited from the rise in yields as the economic recovery is in full swing. Similarly, energy stocks have done very well and the rally has been led by companies in the oil industry such as ExxonMobil and BP. Small-cap stocks have also enjoyed gains in January. This is because as economies begin to open up and the demand for goods and services picks up, small companies have the most to gain from the economic rebound. Furthermore, they also stand to benefit from the influx of fiscal and monetary stimulus. Overall, the outlook for this month looks positive for the stock markets. The Nasdaq Composite Index has the best odds of gains this month but all sectors will continue to benefit from the broad-based recovery. Investors should keep an eye on the performance of the individual sectors to identify attractive buying opportunities for the rest of 2021.