Are some MAG Seven cowboys falling off their horses?

February 28, 2024No Comments

The Magnificent Seven (MAG-7) stocks have been market leaders since early 2023. Actually, they’ve pretty much been the sole drivers behind the success in the SPX. Last year, most of these cowboys were riding in unison. Lately, not so much. A few may be falling off their horses. Lets take a look at the charts, and ponder on the significance of less magnificence.

Performance less uniform amongst the Mag-7’s

The Mag-7 stocks are comprised of MSFT, AMZN, META, AAPL, GOOGL, NVDA, TSLA. Contrast n’ compare time again, kids. Let’s get at it.

What the inconsistent performance by the Mag-7’s implies

MAG-7 leadership may be weakening…

MSFT

Microsoft is consolidating – although the recent peak on this daily chart is lower than the last peak. Price momentum (MACD) and moneyflow momentum (MFI) are diverging negatively. Verdict: A weakening chart.

AMZN

Conflicting signals from Amazon’s stock. A higher high on the daily chart, and a gap up. MACD is weakening slightly, while MFI is starting to turn around after weakening over most of this month. Verdict: A neutral chart.

META

Hard to argue with price on this chart. Still trending up making new highs. Big, big gap below it indicating some irrational exuberance is on hand. MACD and MFI are decidedly diverging against that price move. Price strong, momentum & moneyflow not so much. Verdict: Neutral.

AAPL

A right angled consolidation pattern. Lower highs, but flat lows indicating support. Falling MACD and MFI. Verdict: A weakening chart.

GOOGL

Pretty much the exact same picture as seen on the AAPL chart for Google. Verdict: A weakening chart.

GOOGL - MAG-7 stockchart

NVDA

Yikes! The wonder-kid stays the course with decidedly higher highs in an uptrend. MACD remains with the trend, while MFI is diverging slowly. Verdict: A strengthening chart (but keep an eye – given the MFI weakness).

NIVDA - MAG-7 stockchart

TSLA

I did a 6-minute video on this stock recently. Its worth watching if you like neartermed trading opportunities – click here. Longer termed downtrend, but very strong MACD & MFI signals from oversold conditions. The gap down is being filled, and the potential target is to approach its downtrend line. Verdict: strengthening.

Tesla - MAG-7 stockchart

Of note

  • The Mag-7 stocks show only 2 strengthening patterns (TSLA, NVDA). Two of the charts could be considered neutral patterns (META, AMZN). But three of the Mag-7’s are not so magnificent of late. GOOGL, AAPL & MSFT are all showing weakness on the daily chart.

 

  • With only 2 of the MAG-7 stocks looking truly magnificent, and the other 5 either neutral or weakening, this adds evidence to my hypothesis of a correction in the SPX & NAZ shortly.

 

  • I was on BNN Monday. Lots of variety in the stocks discussed, along with an opening discussion on “Dumb Money” sentiment in the markets right now. Here is the link. 

 

  • I just finished recording a video where I looked at the charts of ETF’s representing every International (country) index. Many, many charts – which is why sometimes the video’s are a better way for you to follow my technical work. A blog would have been far too lengthy. The video should be released within a number of days. Be sure you don’t miss this video, and others, by subscribing here. Also – If you don’t already, you can ensure you never miss a blog or newsletter by subscribing here. You guys know my policy: You will NEVER be solicited, spammed or any of those other nasty things if you subscribe to ValueTrend!

 

    • Yesterday, Statistics Canada released its annual survey on business (and government)
      capex intentions for 2024. The Capital and Repair Expenditure Survey shows that the Canadian economy, which has seen stagnating productivity since 2017 (coinciding with Trudeau’s policies invoked after his 2015 election) is now the WEAKEST OF THE G-7 NATIONS.  Time for Canadian investors to look abroad! That, along with electing a more business-friendly government. “The productivity gap with the U.S. is widening, with no end in sight, and this has important implications because what it means for the future is ongoing Canadian dollar depreciation as an antidote to Canada’s lingering competitive disadvantage relative to the U.S.” David Rosenberg

 

 

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