Which Magnificent 7 stocks will you pick in the second quarter? | a cautious investor

This article refers to an activity I like to call “single stock portfolios.” In this scenario, you can only own one stock in your portfolio for the next three months and choose one of the following eight stocks: Which one would you choose? Why?

The beauty of this exercise is that it forces you to consider eight different charts. Some have similar characteristics, while others show dramatic differences. Ultimately, you’ll have to decide whether to stick with top-performing names like NVDA, which hit an all-time high in March but is showing a scary bearish momentum emanation.After r you can select AAPL, test price and Fibonacci support. Failed to break the all-time record.

Let’s review each chart in turn to come up with a good technical framework for your decisions.

NVIDIA Corporation (NVDA)

Nvidia ranks first among groups using StockCharts Technical Rating (SCTR), and its trend score ranks in the top 2% of all large-cap stocks. NVDA also features a bearish momentum divergence. March closes are higher, but momentum peaks according to the RSI indicator are lower. The stock is currently about 69% above its 200-day moving average, suggesting it could be significantly overextended from here.

Metaplatforms (META)

META also features weakening momentum characteristics, with RSI falling below 50 this week for the first time since December 2023. Both of these stocks are still hovering above both upward moving averages, suggesting that the long-term upward trend is very much intact.

Netflix (NFLX)

The third chart again shows a classic bearish momentum divergence, with the highs of January, February, and March all marked by lows in the RSI. This means that the upward momentum toward successive new highs is tapering off. However, the relative strength is still very strong as NFLX has consistently outperformed the S&P 500.

Amazon.com (AMZN)

Here’s the first chart that actually shows a new 52-week high to end the shortened holiday week. AMZN probably has the most consistent uptrend, with progressively higher highs and higher lows since the October 2023 low. RSI is still strong but not excessive, indicating that further upside is very likely.

Microsoft (MSFT)

We are currently on 5 consecutive charts with bearish momentum divergence. Can you see why I am skeptical about the possibility of further upside for the Nasdaq 100?, given ongoing signs of weakening momentum? Despite the falling RSI, MSFT maintains a solid upward trend above its rising 50-day moving average, which served as short-term support in January and March.

Alphabet Inc. (GOOGL)

Here we begin to see the differences between these major growth names. Alphabet had a higher gap in mid-March and has seen further gains since that price gap. Now we are retesting the all-time highs around $154. Will a second attempt to break $155 actually succeed? GOOGL broke its 50-day moving average in 2024 and actually moved higher after testing its 200-day moving average in early March.

Apple (AAPL)

With AAPL, we have now reached the weakest position of the group in terms of 2024 performance. Apple earned a score of 9.1 in the large-cap SCTR rankings. This puts it in the bottom 10% of large-cap U.S. stocks, based on trends. This chart is currently testing the price and Fibonacci support, a breakdown of this key support could open the door for further downside for AAPL..

Tesla Inc. (TSLA)

If you’re looking for a classic example of a stock in a confirmed downtrend, look no further than TSLA. Here we can observe lower highs and lower lows, price below two downward moving averages, and RSI consistently below the 50 level. TSLA also fell below Fibonacci support in early March. Voting for Tesla would be an optimistic leap of faith for a name that certainly didn’t impress in the first quarter.

There are 8 stocks and a brief technical analysis summary is included for each chart. Which stocks do you think have the best opportunity in the second quarter? Why? Watch the video below and leave a comment with your vote and reasons!

RR#6,

dave

P.s Are you ready to upgrade your investment process? Check out our free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

disclaimer: This blog is for educational purposes only and should not be construed as financial advice. You should not use any of our ideas and strategies without first evaluating your personal and financial situation or consulting a financial professional.

The author had no positions in any securities mentioned at the time of publication. All opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.