A Closer Look at Magnificent Seven Stocks

The stocks known as the "Magnificent Seven" has had a pretty mixed start to the year. This group includes high-profile tech companies that delivered excellent returns over the past decade: Meta Platforms, Apple, Microsoft, Nvidia, Amazon, Tesla and Alphabet.

These seven stocks delivered blockbuster gains in 2023 and were responsible for most of the upside in the benchmark S&P 500 index because of their sheer size, a combined market capitalization of +13.3 trillion USD.

Here's a closer look at the "Magnificent Seven" stocks, using weekly stock charts:

Meta Platforms (META)

META stock was setting up for a long-term double top, but it broke out and is now +28% above that resistance. The problem now is that the advance from the mid-2023 consolidation is parabolic, and vertical up moves beg for correction. There is currently a PMO negative divergence, but the PMO hasn't topped yet and the divergence could be erased.

Prognosis: Still magnificent. Watch out for possible correction and buy opportunity.

Apple (AAPL)

AAPL stock is dealing with trying to move production out of China, and this week it shut down its EV program. The latter will probably have more effect on the EV industry than AAPL, but I'll deal with that when I get to Tesla stock.

Technically, we have a bearish rising wedge and a Price Momentum Oscillator (PMO) negative divergence.

Prognosis: AAPL doesn't look so magnificent for at least on the short-term.

MICROSOFT (MSFT)

MSFT stock tried to form a double top mid-2023, but it broke out and moved +22% above that resistance. It has formed a long-term bearish rising wedge, and there is a PMO negative divergence, but price movement is strongly bullish.

Prognosis: Magnificent, but with some bearish undertones.

Nvidia (NVDA)

MVDA stock hit resistance at 500 last year and consolidated for about six months. In January, it broke out and moved over +60% above the resistance at 500. Its biggest problem now is the parabolic advance from the 2022 lows. As I said before, parabolic up moves beg for correction.

Prognosis: The most magnificent of the Seven. Correction is likely, but magnificence should prevail.

AMAZON (AMZN)

AMZN stock suffered mightily during COVID, but it has had a magnificent rally for the last year. The most obvious problem is that it will run into strong resistance at the all-time highs of 2021, and at its current rate of climb, it will hit that resistance in just a few weeks.

Prognosis: Still magnificent, but due to run into long-term resistance.

TESLA (TSLA)

Apple's recent exit from the EV business is the most dramatic evidence to date of the EV industry and the public's disillusionment with electric vehicles. TSLA is currently -50% down from its 2021 all-time high.

Prognosis: No longer magnificent and it's doesn't look promising.

ALPHABET (GOOGL)

GOOGL stock has run into resistance at the 2021 top, and has formed a long-term double top. The rising trend line from the 2022 low is still intact, but there is a PMO negative divergence. If that trend breaks, so will its magnificence.

Prognosis: Not good at this point. Magnificence is endangered, but the stock trades at a P/E ratio of 23.61 as of this writing. By that metric, it's the cheapest stock in the Magnificent Seven, which paves the way for more upside in its stock beyond its recent all-time high.

Despite the outperformance of the Magnificent Seven in 2023, their outlooks in 2024 (and beyond) notably differ. Three of the Magnificent Seven are not only underperforming the broader market this year; they're also falling. Through Friday's close, Tesla has declined 18.45% in 2024, Apple has tumbled 6.57% and Alphabet is down 1.83%. The S&P 500 is up 7.70%.

Alphabet stock remains an interesting investment opportunity in 2024, despite facing headwinds and competition. The company’s strong fundamentals, diverse revenue streams, and investments in AI position Alphabet stock for continued growth in the years ahead.? Similarly Meta shares continue to look good and Wall Street is in love with Meta because of its commitment to efficiency and profits - it even started paying dividends - along with the fact it reaches roughly half of the global population.

Happy Friday and Happy Tradind !!.