I have been hearing comments that some of the Magnificent Seven no longer qualify for membership, so I thought a quick look at them might be helpful. I’m going to use weekly charts.
Apple (AAPL): AAPL 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 we’ll deal with that when we get to Tesla.
Technically, we have a bearish rising wedge and a PMO negative divergence.
Prognosis: AAPL probably won’t be so magnificent for at least a few years.
Amazon (AMZN): AMZN 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.
Alphabet (GOOGL): GOOGL 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 is broken, so will be its magnificence.
Prognosis: Not good at this point. Magnificence is endangered.
Meta Platforms (META): META 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.
Microsoft (MSFT): MSFT 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): NVDA 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.
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, and my opinion is that it is not going to recover.
Prognosis: No longer magnificent and probably will not recover.
Conclusion: AAPL and GOOGL are fading and, while they are solid businesses, may fall short of magnificence for some years. TSLA is done for. The rest are still magnificent but with some reservations for the intermediate-term. So, Magnificent Five?
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Carl Swenlin is a veteran technical analyst who has been actively engaged in market analysis since 1981. A pioneer in the creation of online technical resources, he was president and founder of DecisionPoint.com, one of the premier market timing and technical analysis websites on the web. DecisionPoint specializes in stock market indicators and charting. Since DecisionPoint merged with StockCharts.com in 2013, Carl has served a consulting technical analyst and blog contributor.
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