Now Will the Big Tech Take Charge?

The major markets continue to trend bullish. And if you listen too much to the TV commentary, it may seem that they are going up against all odds. I do not agree. Because the trend is your friend until it is not. The geopolitics, economy, trade policies, interest rates, currencies all have an impact. However, there is no defined and proven way to say what the net of all these factors adds up to. The only thing we can say is whether stocks are going up or down. And so far, they continue to go up.

The interesting thing is that during all this trending up of the stock markets, the Big Tech stocks have not exactly been the leaders. Liz Ann Sonders of Charles Schwab posts the following table on a regular basis on the X platform. And we can see that only 3 of the 7 Magnificent 7 stocks are doing better than the SPX index.

Certainly, we know the challenges TSLA and AAPL are facing. But even GOOGL and AMZN have been performing poorly so far this year.

I actually trade FNGS (actually FNGB which is the 3x leverage of FNGS) which is a bit different than the Magnificent 7 (MAGS). It does not have TSLA and has 4 other stocks - CRWD, NFLX, AVGO and NOW - to make it a 10-stock equal weighted basket.

Here is the YTD performance of all the 11 stocks

MAGS is down -3.16% YTD

FNGS is up +7.67% YTD

We can see that TSLA has been a huge underperformer bringing the MAGS down. And NFLX and CRWD have been big winners taking the FNGS up.

So, what is in store for the market from Big Tech going forward through the rest of the year. Will they step up to the plate to ensure that the stock market has the legs to keep going higher?

Let us start with the trending heat map for the 11 stocks.

Clearly, TSLA is still struggling. AAPL is also still looking bad although not as bad as it was looking earlier. The others are looking quite good and in line with the SPY and QQQ trending.

Let’s review the daily charts to see the trending better as the above picture is a point in time (current) and it can be useful to review where they are coming from.

AAPL

We can see that price has been in that shaded range for several weeks now. Also, price has been making equal highs and equal lows which is not exactly bullish behavior. Friday price has closed just above that 1st descending trendline. So, now we have to wait and see if that can hold. Then there is also resistance around the 210 area. In order to get out of this shaded zone, price needs to go over the 214 level to make a new higher high. That can be the beginning of the repair work. AAPL has their conference coming up and maybe that can be a catalyst. But in recent times they have disappointed when it comes to any worthwhile innovation coming out of them. So, I will believe a recovery when I see it.

AMZN

AMZN has made a complete short-term U and now the question is whether price can take out this area where there is prior resistance. Price needs to go above 216 to make the higher high and also move over that resistance level. Trending is bullish for now.

AVGO

AVGO made new highs prior to its earnings but has fallen back within a support and resistance zone post earnings. It is still trending solidly bullish with price well above the 20-day moving average (red). Also, it is only 1 of 3 of the 11 Big Tech stocks that I track whose price is not only above its 200-day moving average (yellow) but also the 50-day (purple) is above the 200-day moving average. Trending bullish.

CRWD

CRWD has been one of the best performers among my Big Tech 11 stocks. Price fell post earnings but has already started to recover well. Trending bullish.

GOOGL

GOOGL price is trading in that shaded zone for a couple of weeks now. Price did break above its 200-day moving average (yellow) on Friday. And the trending also has been good overall. It has been convincingly making higher lows but the higher highs have been unconvincing so far. Perhaps with the strong move up from Friday, that will change.

META

META price has managed to break out of one resistance zone and now approaching what I would term as a weak resistance at around the 700 area. Price has been able to stay above that steep rising trendline as well. Everything looks good so far and trending is bullish.

MSFT

MSFT has had a very strong almost unstoppable run since the middle of April. Friday it touched a new high and also closed on a new high. Strange to see MSFT being so aggressively bullish. Definitely a welcome sign. A pullback to the prior high level would be normal but then it should again keep its bullish trend alive.

NFLX

The NFLX price action has been flawless and there are no signs of any exhaustion or pullback. Yes, Friday was a down day but price still respected that steep rising trendline.

NOW

NOW has been trading in a range as shown for the last several weeks. The short-term moving averages are all bunching up now and price needs to make a decision to step out of that shaded zone in one direction. The last few days price action indicates it has a higher probability of breaking to the upside.

NVDA

The NVDA price action has been steadily improving. It broke above the first trading zone (small, shaded area) and now has gone into the real battlefield where it has struggled previously. Trending is bullish so it should be a matter of time before new highs are made.

TSLA

TSLA per my characterization has become a vibe stock. There are just too many variables to make any meaningful conclusions from the chart. Right now price was not able to close over the 200-day moving average (yellow) but did bounce off the 50-day moving average (purple). Can I make anything of that? No. Because there will be some other x post or something unrelated that will likely come and dictate what happens to the stock price next.

That’s all for now. Do check my X posts during the week for my insights as the week progresses. Have a great week ahead.