I love to write during market downturns. I believe that this helps me to keep a level head and as much as possible, I hope this helps you too.
I write with no ChatGPT so do bear with the occasional slag and grammatical errors. This article reflects my opinion. Its not a job cover letter.
As an overarching “theme” to this article, my current stance on the market is that what’s happening now is one of Trump’s post-election gifts. Currently, most of the magnificent 7 stocks are trading at about 20-25% off their all-time high prices setting them back about a quarter to December 2024. While it is uncertain if current levels are the lowest that these stocks can go, technical indicators compel me to deduce that we are likely in correction territory rather than an all out CRASH. I can’t articulate this in words but the “amount?” of panic just doesn’t feel like what it was during Covid. Sure there is some doubt and volatility but news headlines are not yet SCREAMING crash and fear. It is just a lot of Ifs and what Ifs.
I won’t be going through all 7 stocks but instead, I’ll give a broad overview via the MAGS ETF. Following which, I’ll be sharing my thoughts on META, GOOG & MSFT which are my top picks among the 7.
Overview: Roundhill Magnificent Seven ETF – NASDAQ: MAGS
The Roundhill Magnificent Seven ETF offers equal weight exposure to the “Magnificent Seven” stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. MAGS is the first-ever ETF to track the Magnificent Seven.
- Since 2024, the Mag 7 stocks have almost 2x investors their money as a whole. (Green Range)
- Recent volatility has shaved aprox 20% off (Red Range) the value of Mag 7 stocks when compared against their 52-week high ahieved in Jan 2025.
- At current levels, the price action appears to have taken a breather and has retraced back to its linear support levels. (Orange Line)
- We have been consolidating at this level for about a week now. (Blue Arrow)
- What’s different is that with previous retracements, the price action did not consolidate, instead it took merely a day or two to bounce off the linear support line. (Respective Green Arrows)
- I can conclude with conviction that any price action movement out of the current consolidation zone(Orange) can result in potentially drastic moves for the market in either direction.
1. Meta Platforms Inc. – NASDAQ: META
Meta remains my highest conviction play. Here are my thoughts.
- Based on dynamic support levels, we can see that META is still in an uptrend given that both 50 Day Moving Average (Indicated in Purple) and the 200 Day Moving Average (Indicated in Yellow)are both sloping up in tandem.
- No Death Cross has formed (Where the 50 MA crosses below the 200 MA) hence it is likely we experiencing a correction and not a crash yet….
- Considering that the stock has gone up by almost 7x since its pandemic lows of $100, my personal opinion on Meta is that I will buy the immediate retracement (and I have bought as of last week) as the trend line (Indicated in ORANGE) is still holding up.
- Should the stock continue to fall below $600, subsequent support levels include,
- $550 – I consider this to be a weak support level. Likely any downward pressure will break below this with ease. (BLUE Dotted Line)
- $400 to $450 – This is a strong support level where it was the previous resistance turned support for the price action. Should we revisit this range, I will go on a buying spree (BLUE Range)
2. Alphabet Inc. – NASDAQ: GOOG
I’ve always considered Google to be the bedrock of my portfolio. However, of late I’ve lost count of the number of headwinds hence I now ignore the news. Just kidding I can’t ignore the news as I don’t live under a rock. Search is under threat and the moat of YouTube is also under threat given how Mr Beast sort of moved away from the platform to Amazon Prime. There is always a reason to be bearish about Google. Nonetheless here are my thoughts on its price action.
- I can quite confidently say that Google lags behind the rest. Unlike Meta which has given investors a whooping 7x since its lows, Google has returned barely 2x. One would that given how “slow” it has been to catch up their decline would be slow as well but unfortunately, they are down a little more than the others as they trade at about 20%+ off their recent 52-week high.
- In terms of trend, the uptrend remains intact for Google given that both 50 Day Moving Average (Indicated in Purple) and the 200 Day Moving Average (Indicated in Yellow)are both sloping up in tandem but I would say that this uptrend is a little weaker as compared to Meta.
- The stock currently trades at about $160 which in my opinion has more room to fall hence I’m camping at $150 (Green Line). Past this, the other support levels that I’ve identified include,
- $125 – I believe that support is strong here given that it was the previous resistance turned support (BLUE Line)
- $80 to $900 – This is where the stock found strong support back in late 2022 where I entered previously at $100+ (BLUE Range)
3. Microsoft Corp. – NASDAQ: MSFT
Microsoft continues to be the king of software stocks and is in my opinion, unlikely to be dethroned anytime soon. Sure they are behind in AI innovation but Windows continues to be the dominant operating system globally with an impenetrable moat surrounding it.
- While Microsoft remains one of my top favorites, they show weak technicals in the near term which compels me to be even more strict when it comes to setting buy orders. Volatility is was high for much of 2024 with the stock barely moving. (Frequent clashing of 50 and 200 Moving Averages)
- As of 2025, the stock has broken below a strong $400 support level which was tested 3 times in 2024 (Thick Red Line !!).
- I currently have a buy order placed for $315 (Red Dotted Line)which is approx. 20% lower than where we are today.
- Considering that this point was where the stock previously found support back in 2023 I would say with reasonable conviction that it could be a strong support level moving forward.
- The next area of support after that would be the $200 to $225 range (Red Range)which was the previous resistance turned support for the stock. Should Microsoft reach these levels, we’ll be looking at almost 50% off their 52-week highs! Talk about a 1-for-1 deal!
- Microsoft surely looks like one of the more bearish picks amongst the Mag 7 hence I would say that patience is the key here.
Back to MAGS & Tesla
Picking individual stocks can be risky hence most would advocate an ETF like the MAGS. But in my opinion, where is the fun in that? Also, at this point, some might wonder, “What about Tesla?”. Oh my, I can go on all day about Tesla. Even internally amongst us editors at Dr Wealth, the team is equally split between Tesla bulls and bears. Would you like my opinion on Tesla? Let me know in the comments if you would like a piece on that!
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