MAGS: Charting Magnificent 7 Shows New Trend (Technical Analysis)

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travelpixpro It has been some month of April for members of the famous "Magnificent 7." With so much attention focused on these stocks, especially during earnings season, where every quarterly release...

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From that 12/31/2023 article: So for those who would consider this article incomplete without a final ranking, here it is, from most likely to outperform the rest of the 7 to least: 1. MSFT  2. AMZN 3. GOOG 4. META 5. NVDA 6. TSLA 7. AAPL  Data by YCharts So AAPL and TSLA were the riskier ones, and so the most important aspect of that particular exercise was successful over the past 4 months. I avoided the temptation to buy heavily into those 2. For what it's worth, in my trading activity , I did take advantage over that time by owning put options on TSLA and also on ARK Innovation ETF , and ETF that is about 10% allocated to TSLA. I also own AXS Short Innovation Daily ETF  in an intermediate term portfolio. That is an ETF whose sole aim is to provide a return that is the opposite of ARKK. So, like shorting the stocks ARKK owns. Maybe they should call it the \"Cathie Wood-not E","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1046421795.USD":"富达环球科技A-ACC","IE00B1BXHZ80.USD":"Legg Mason ClearBridge - US Appreciation A Acc USD","AAPL":"苹果","BK4501":"段永平概念","MAGS":"The Magnificent Seven ETF","NFLX":"奈飞","IE00BFSS8Q28.SGD":"Janus Henderson Balanced A Inc SGD-H","LU1951198990.SGD":"Natixis Thematics AI & Robotics Fund H-R/A SGD-H","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","AMD.AU":"Arrow Minerals Ltd","FDN":"First Trust Dow Jones Internet I","LU0149725797.USD":"汇丰美国股市经济规模基金","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","LU1951200564.SGD":"Natixis Thematics AI & Robotics Fund R/A SGD","ARKK":"ARK Innovation ETF","LU0354030438.USD":"富国美国大盘成长基金Cl A Acc","BK7095":"多种金属与采矿","BK4561":"索罗斯持仓","BK4097":"系统软件","LU0957808578.USD":"THREADNEEDLE (LUX) GLOBAL TECHNOLOGY \"ZU\" (USD) ACC","LU0238689110.USD":"贝莱德环球动力股票基金","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0170899867.USD":"EASTSPRING INVESTMENTS WORLD VALUE EQUITY  \"A\" (USD) ACC","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","LU0053666078.USD":"摩根大通基金-美国股票A（离岸）美元","BK4514":"搜索引擎","LU0080751232.USD":"富达环球多元动力基金A","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","SARK":"资本空头创新ETF","FNGS":"MicroSectors FANG+ Index ETN","AMD":"美国超微公司","BK4515":"5G概念","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","MSFT":"微软","LU0171293334.USD":"贝莱德英国基金A2","LU0109392836.USD":"富兰克林科技股A","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","AVGO":"博通","GOOGL":"谷歌A","LU1242518931.SGD":"Fullerton Lux Funds - Asia Absolute Alpha A Acc SGD","BK4533":"AQR资本管理(全球第二大对冲基金)","NVDA":"英伟达","LU0130102774.USD":"Natixis Harris Associates US Equity RA USD","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0511384066.AUD":"SUSTAINABLE GLOBAL THEMATIC PORTFOLIO \"A\" (AUDHDG) ACC","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","AMZN":"亚马逊"},"translate_title":"杂志：图表宏伟7显示新趋势（技术分析）","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMD":1,"SARK":1,"NVDA":1,"NFLX":1,"MSFT":1,"MAGS":1,"GOOGL":1,"FNGS":1,"AAPL":1,"AMD.AU":1,"AMZN":1,"ARKK":1,"AVGO":1,"FDN":0.9},"content_text":"travelpixpro It has been some month of April for members of the famous \"Magnificent 7.\" With so much attention focused on these stocks, especially during earnings season, where every quarterly release is an \"event\" worthy of pre-gaming, the outsized reactions to those announcements leave many on Wall Street exhausted from all the drama. This earnings season has been as wild as any, with moves of 10% or more in these stocks routinely following their earnings releases after market close. And those moves seem to have confused many on Wall Street, with strong fundamental reports met with selling pressure, or the opposite. And we're not done with Mag 7 earnings season yet. Apple (AAPL) is up this week on May 2, and Nvidia (NVDA) doesn't post their results until May 22. So, this is a good time to assess where these stocks are, and also offer my take on how I am participating in them. As is typically the case, my approach to them is, well, atypical. On the final day of 2023, I posted an article with a technical analysis (chart) view of these 7 stocks. My charting work goes back to 1980, when our tools of the trade were graph paper and a pencil, and getting the prices out the Wall Street Journal. I don't know what produced dirtier hands, the use of the pencil, or the ink from the newspaper. Probably the latter. But I digress. Here's a quick summary of how I ranked them at that time, and a few words from my observations in each of the charts. Then as now, I do not view this as some sort of stock picking contest, and my concern is not how neatly the performance over any period of time lines up with what I said on one day 4 months ago. For me, charting is about trying to evaluate risk. We all know that anything can go up in price at any time, but how much risk are we taking? Call me simple, but that's what I want to assess before I invest, not find out after I am down 30% in a month. From that 12/31/2023 article: So for those who would consider this article incomplete without a final ranking, here it is, from most likely to outperform the rest of the 7 to least: 1. MSFT (chart looks least vulnerable, though it's a close call) 2. AMZN 3. GOOG 4. META 5. NVDA 6. TSLA 7. AAPL (the one stock of the 7 that appears to already be slipping a bit) Data by YCharts So AAPL and TSLA were the riskier ones, and so the most important aspect of that particular exercise was successful over the past 4 months. I avoided the temptation to buy heavily into those 2. For what it's worth, in my trading activity (separate from investment activity), I did take advantage over that time by owning put options on TSLA and also on ARK Innovation ETF (ARKK), and ETF that is about 10% allocated to TSLA. I also own AXS Short Innovation Daily ETF (SARK) in an intermediate term portfolio. That is an ETF whose sole aim is to provide a return that is the opposite of ARKK. So, like shorting the stocks ARKK owns. Maybe they should call it the \"Cathie Wood-not ETF.\" OK, no more jokes. I clearly did not see the NVDA freight train coming. But again, I am more focused on avoiding the big losses, which is a combination of what you own and especially how much you own of it. For what it is worth, I cashed in nicely earlier this month by holding deep out the money NVDA puts (cheap to buy, and often it's a lose a little or make a lot scenario). The day that stock cratered by 10% was, shall we say, epic. But as things go with these Mag-7 stocks, just a few days later, any profits not taken end up being big percentage losses. That's why the focus here is on the investing part, not the trading part. But the more I see the Mag-7 dominate investor attention, and the more their performance patterns diverge (more on that below), the more I look to devise strategies for myself that can essentially allocate tactically to each of these names, long or short, via stocks, ETFs, or options. The 3 at the top of that December list, Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), have all posted positive returns through the first 1/3 of 2024, though MSFT's ascent this year has been slow and gradual, like a mature value stock. As its earnings recently showed, it is more than that. And, I had META toward the middle, and while it ended up there, it is down more than 15% this month, most of that coming in one day last week. This all emphasizes what I said earlier: to me, this is an analysis, not a contest. It is not really a choice among these 7, but rather seeing which of these 7 offer strong reward potential with modest risk of a blowup. Looking forward, and seeing opportunity within the Magnificent 7 Anyone can look at this chart below, showing 3 month \"rolling\" returns of the 7 giant stocks, and make their own conclusions about what is important to them. What is most important to me, even striking, is how over the last few years, these stocks have stopped correlating with each other as much as they do. That could be due to simply the different fortunes of each evolving, that NVDA has taken over the conversation, that TSLA is threatening to leave the conversation, or the simple fact that these 7 are spread across a few market sectors. Data by YCharts Looking back since the start of 2022, it is a different picture. If there was ever an example of a \"recency effect-driven stock market,\" this is it. We're living through it right now. Because in the past 28 months, excluding NVDA's parabolic (but now challenged) upward ride, the other 6 stocks are a mixed bag, with only META and MSFT producing more than what I'd call \"pedestrian returns\" or worse. 28 months, and only META has earned more than 1% a month, and it just tanked 15% in a day. Seeking Alpha This only intensifies my interest in seeing if I can tactically allocate to these 7 names in a variety of ways, to produce longer-term returns with less risk, while owning the same names that apparently most investors now do. As I develop that process, I'll report back here. Indexation and sector effects on the Magnificent 7 When the S&P 500 or Nasdaq 100 ETF get massive inflows, these stocks all automatically benefit, since collectively they make up 28% of the S&P 500 and 40% of the Nasdaq 100 (see table below). Seeking Alpha Yes, 7 stocks make up 2/5 of a 100 stock index. So the others matter, but not nearly as much. This is another reason why I am devising a sub-strategy focused on these 7 stocks, in a way that allows me to profit from them in either direction over different time frames. That increased pattern of diverging performance likely has something to do with the fact that those 7 stocks cover 3 different S&P 500 sectors. MAGS: an ETF that invests in the Magnificent 7 And that leads me to the Roundhill Magnificent Seven ETF (NASDAQ:MAGS), which just crossed its 1-year anniversary and just passed $250 million in assets. It simply owns the 7 stocks, through direct purchase and swaps and forward contracts. YCharts Ironically, I have seen the fund described as investing in the \"tech giants\" but technically, they are not all tech stocks. Importantly, the manager will review the holdings each year to determine if they all still deserve to be in the ETF. We'll see at the next rebalance if TSLA is still viable, or if perhaps a stock like Broadcom (AVGO) enters the picture (the ETF will own 5-10 stocks). This is an active ETF in that sense, and the holdings are equally weighted but rebalanced quarterly. With some of the moves seen in this group, the weightings are far from equal at the moment. But the ETF's 81% turnover rate speaks to the willingness to shift the allocations more frequently. YCharts Here's MAGS over the past 12 months versus the MicroSectors FANG+ ETN (FNGS) which was the ETF I included in my last Mag 7 update on 12/31/2023. FNGS owns a few additional stocks and also weights equally, so that return advantage of this time frame has a lot to do with 2 of those extra 3, Netflix (NFLX) and Advanced Micro Devices (AMD), up 83% and 75% respectively over that time. Data by YCharts As I am more interested in the individual stocks themselves, and from more of a tactical standpoint, MAGS is more of a benchmark for me than a potential holding, and thus I'll assign a hold rating to it. But investors who are interested in considering a \"done for you\" allocation to these 7 stocks can research MAGS. What I do like about MAGS from a structural standpoint is that the holdings are fixed for a while, but the weightings will be reset each quarter. As such, this is a bit similar to the stock portfolio I am building via my Yield At a Reasonable Price (YARP) approach, which will have 40 names, tactically weighted to capture more dividend yield. An updated chartist's assessment of the Magnificent 7 I'm using weekly charts, as they tend to eliminate some of the noise in shorter-term charts, and it has been quite noisy out there this month. AAPL Dipping down from the top of a trading range of $126-$196, PPO recently crossed into negative territory, indicating a change in momentum. PPO is the Price Percent Oscillator, my favorite trend indicator. Note I don't cover my charts with tons of indicators, simple guy I am. That's a lot of downside risk for that upside, so I don't see a good reward/risk tradeoff here. TC2000 AMZN Not a friendly chart. Love the company, iconic, bullet-proof business unless/until the government decides it is too monopolistic. But that's a sharper \"about-face\" recently, getting rejected at what is now a triple top around $187. Markets have a memory. The downside is steep, upside is always there, but will take some real FOMO/buy the dip action to make that happen. I prefer to think of AMZN as \"If I see it back down around $82, approximately where it bottomed in every selloff since 2019, I'll back up the truck to buy it.\" Until that time, the only consideration is \"renting\" it and not \"owning it\" long-term from these levels. Barchart GOOGL While I am more, the type that prefers to buy something that is down but showing signs of emerging from that slump, this is a very intriguing chart. The earnings got everyone excited, it appears, and YouTube appears ready to dominate the online world. The new dividend announcement was another sign of confidence, and I wonder if this is going to be a Dow 30 stock in the near future. But with all I say about much of the stock market having gone \"net nowhere\" for a while, such as GOOGL recently selling at the same price as in late 2001, 2 1/2 years ago, that could just make for a better bullish case. Spikes like we saw last week are sometimes fake outs, but if it holds up here for a while, there's a case to be made for another leg higher. Barchart META A bit of a mirror image of GOOGL, thanks to a very different reaction to its earnings last week. Downside to a pair of round numbers, $300 and $200, are on the table, but that's likely to be more from macro influences that effect most of these 7 stocks. As with GOOGL, META will tell us a lot more in the coming weeks, but the bottom line for now is this looks lower. Maybe much lower. Barchart MSFT \"Mister Softee\" has a soft-looking chart. But at least it has to tell. Barchart NVDA Easily the toughest one for me to analyze, given the hero-like aura of this stock, offset by a valuation that assumes it will operate perfectly and get all the potential breaks it needs over the next decade. That rarely happens. But the stock snapped back from its recent rout, and has at least some short-term potential. Beyond that, I suspect it is a mish-mosh of delivering on expectations and the degree to which the mania valuation levels can sustain themselves. This all adds up to the stock I am least likely to take a big position on one way or the other, at least for now. Barchart TSLA Some love Elon Musk. Some despise him. I am annoyed by him, but as a chartist, I put all of that aside and try to determine what price is telling me. With TSLA, there's the underlying potential of its technological leadership and innovation. And, there's the sense that it may always be \"potential\" and not deliver as expected. Yes, that's a pun on the serial disappointing delivery numbers (of cars) here. The chart is telling me that TSLA is sort of nowhere, long-term. A range of $400 to $100, shorts battling Musk fans about who's going to be right, and the stock has spent a few years carving out a narrowing range I show in the thicker lines below. If this stock breaks down below its recent $140 low, all bets are off (unless it is one multiple TSLA short ETFs that now exist). The upside is there, as it always is, but there's a lot of work to do to really bust out to new multi-year highs. As with NVDA, I'm more looking to see how to profit from immense downside in the future, rather than a giant comeback. But that's just me. Barchart Conclusions: my renewed perspective on the Mag 7 and QQQ Until the buy-the-dip enthusiasm gets flushed out, a la the year 2000 and the dot-com bubble, these stocks could chug higher. I think that's the less likely path from here, but the worst mistake I think any investor can make is to assume that something is near a 100% certainty. I am ALWAYS trying to balance my analysis and challenge every conclusion I make. As someone taught me way back in my career, before I make a move, I try hard to \"kill the idea.\"  So I am going forward with some enthusiasm toward the idea of running a segment of my portfolio that aims to outperform the Nasdaq 100 over time with much less risk, by throwing all of my offense and defensive weapons at it. The stocks themselves, QQQ, put and call options on the stocks and QQQ, and the newer leveraged and inverse ETFs available on many of these stocks. More on this approach as the story develops!","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2431520678"}