By Shah Gilani,Shah Gilani – Total Wealth Research, 2024-08-07
I've got something different for you in today's Buy This, Not That.
We're looking at the Magnificent Seven… because they should be on everyone's “Buy” list after this week.
Grab a pen and notebook… because you'll want to write down what I have to say.
I'll go over not only where they are and where they've just been… but also where I think you should buy them.
If you don't own them already… this dip is your chance to get in on the next stage of the Mag Seven's meteoric rise. (Because it ain't over yet, people.)
It's all in the latest episode of Buy This, Not That… your exclusive guide to the stocks that are worthy of your money.
Click on the thumbnail below to dive in.
TRANSCRIPT
Microsoft
Hey everybody, Shah Gilani here with your weekly BTNT, as in Buy This, Not That. This week, however, we're going to do something a little different. I'm going to talk about the Magnificent 7 because they should be on everyone's buy list. And for those of you that don't own it or those of you that do own it, as in the Mag 7 group or any of the components, you might be wondering what to do now.
So I'm going to go over the Mag 7 and I'm going to talk about where they are, where they've just been, and where support levels are. Why is that important? Because the market's acting crazy. I don't think the selling is done.
Yes, the positives for the market are the economy is still chugging along. We're not in a recession yet, even though things look like they're leaning into a possible Goldilocks soft landing, maybe harder than soft, something like that. Because all of a sudden some of the metrics seem to be slipping and the worry is that the Fed is behind the curve again and should have cut in July and may have to do an emergency cut, which I don't think they will. But the bottom line is there's plenty of room for the Fed to cut rates.
That should be supportive of stocks in terms of this, shall we say, dust up, mini panic, crazy volatility because it is that and more. So yeah, there are some underpinnings of support and hope. Earnings, earnings are good. Earnings have not been great historically, but they're pretty darn good, actually on track for a record this quarter when all is said and done.
About 70% of S&P 500 company stocks, companies have reported and margins are just fabulous. Really fabulous with a 12 handle on profit margins. So those are positives. Yes, it's true, analysts are starting to cut earnings for the next quarter.
Why? Because they see perhaps a slow down that everyone else seems to be pointing to and they think that's going to impact the earnings. And they already had lofty expectations for third quarter earnings. So we're starting to see some downward revisions.
That's a double-edged sword because it's often easy to beat those downward revisions when we do get to the numbers next quarter. So a lot of decent stuff, but it's impossible, and we would be foolish not to recognize what's just happened. The leadership group has rolled over. And the question is, the big question is as far as the leadership group based on the AI narrative, have they overspent?
When will they be able to monetize all the spending they're going to continue to have to do? And they're all saying that they have to do it. It's better to overinvest than underinvest. So that remains to be seen.
That's a big unknown and that's weighing on markets right now. So let's go take a look at the Mag 7 in no particular order and I'm going to address where they're trading and where support is because inquiring minds need to know. First up on the list, and I'm going to do a little screen sharing on this. First up on the list here is Microsoft, Big Daddy Microsoft, one of my favorite stocks.
By the way, I am recording this for your Wednesday BTNT on Tuesday night. It's nearing on 11 o'clock. Now the thing I'll leave with you here at 11:00 PM is I don't know where the futures are going to be in the morning and I don't know what's going to happen tomorrow, obviously. All I do know is we didn't close that sprightly on Tuesday.
Yes, we had a bounce. Maybe it was a dead cat bounce, but we didn't close on the highs of the day. We didn't close anywhere near there. We gave up most of the big gains that we saw earlier in the day.
And by the end of the day, everybody just seemed a little tired and we closed up on the day, but not very excited. S&P terms, we're up 1% on the day. That's opposed to being down 3% the day before on Monday. So yeah, I'll just leave it at that.
Now Microsoft, here's the dig on Microsoft. Closed on Tuesday 399 and change, as you can see. Yikes people. That's down from 468 bucks back here in July.
July 5th to be exact. The low close on Monday here, 385 and some change. That's below the 200 day moving average. As you can see, this red line, that's the 200 day moving average, that's at 404.
So we closed below, broke through the 200 day moving average on Monday. Couldn't get above it today at 399. Again, 400 days at four, excuse me, 200 day moving average is at 404. Closed at 399.
Apple
Next up, Apple. Now just like Microsoft, pretty ugly. Closed at 207, Apple didn't even have a bounce today.
Closed at 207, people. Yikes, because that's down from 237 on July 15th. That's a pretty ugly chart. The low mark on Monday was 196 bucks and some change.
I'm not impressed. Yes, we're still above the 200 day moving average as you can see here. But this is an off the cliff kind of move here. Below the 200, the 200, excuse me, below the 50 day.
Alphabet
Alphabet closed at 160. Again, look at this rollover, people. Look at all these great moves higher, then bang, July, we are seeing nice moves, peak in July. July 10th for Google, 193.
Amazon
Amazon, and this one is again, you'll notice the similarities here with all of these charts. It's pretty much the same story. This is what the market was afraid of.
Tech rolling over. Amazon was holding up but then all of a sudden just absolutely, sorry, earnings weren't so good. Didn't guide what everybody was hoping for. And gap, goodnight.
Say goodnight, Irene. 161.93 it closed at, up a tiny bit on the day. Now that's down from 201.
Meta
Meta closed the day at 494 and a little bit of change. Call it 9 cents, up 3.86% of the day, hanging in there. Gotta give Meta the credit of being the group leader in terms of hanging in there the best.
Kind of sideways, chugging along. Meta looks the best to me at 494, that's down from four, excuse me, from 542 on July 8th. Oh Monday, it was 450. So I'm going to say that's pretty much where your support is going to be.
Tesla
Tesla is the weakest of the group. Even though some people, huge fans of Tesla, I can't say that I am, especially not the Cyber Truck. Don't get it, see a lot of them around. But Tesla, people, closed at 200, up 0.88% on the day, 200 and change. But that's down from its recent highs of 271. It's a big drop, people. Monday, Tesla got down intraday low at 182.
Nvidia
Last but not least is Nvidia, and Nvidia, of course the darling. What Goldman Sachs called the most important stock in the world just a couple of months ago. Yeah, we need Nvidia to help us out here because it leads the AI narrative story. Obviously the chip maker, par excellence.
Closed at 104.25 on Tuesday, up 3.78%. That's a ugly chart. That's a rollover chart, people.
