This Broken Magnificent Seven Stock Is Poised to Regain Its Leading Position | MEM edge
Entering last week, Magnificent Seven stocks looked more like Magnificent Four stocks. Leadership within the group has become more focused, with Amazon, Meta, Microsoft, and Nvidia doing most of the heavy lifting.
This differs significantly from the more evenly distributed earnings of the Magnificent 7 companies over the first six weeks of 2023, as seen in the orange bar below. The blue bar shows this year’s performance, and as you can see, Tesla (TSLA) is performing significantly worse than its peers.
In fact, TSLA is currently at a 50% discount from its highs, and as Musk puts it, the company is caught between its recent success and its readiness to ultimately drive future growth. Tesla’s sales have slowed in recent quarters. However, the company is in the best position to create new products that could potentially attract new customers to the brand.
Tesla Daily Chart (TSLA)
Tesla’s charts also show a promising future after recording a double bottom formation over the past two weeks, with the stock rising again above its 21-day moving average on Thursday on above-average trading volume.
Using the reversal of the downward trend due to poor performance in the last May quarter as an example, we emphasized the main characteristics of the stock price reversal. Last May, not only did it surpass the short-term moving average, but MACD and RSI turned positive, indicating bullish momentum. Tesla is currently in the beginning stages of a similar turnaround. RSI is about to turn positive and MACD has already posted a positive crossover.
Long-term 50-day and 200-day moving averages can be a hurdle in the short term. However, a closing price above this moving average would be ideal. Because that would leave TSLA free to trade higher.
Subscribers to the twice-weekly MEM Edge report were notified of the four biggest winners among this year’s Magnificent Seven, as well as other big winners. Along with that name, I’d like to share the stock I picked next on my list of recommended holdings. . Try this report for a small fee using the link above.
warmly,
Mary Ellen McGonagle
MEM Investment Research
Mary Ellen McGonagle is a professional investment consultant and president of MEM Investment Research. After working on Wall Street for eight years, Ms. McGonagle left the firm to become an experienced stock analyst, where she worked with William O’Neill, where she identified sound stocks with the potential to take off. She has worked with clients around the world, including renowned firms such as Fidelity Asset Management, Morgan Stanley, Merrill Lynch, and Oppenheimer. Learn more
