Mag7 ETF Leads and Forms Bullish Pattern – Analyzing the Trends and Setups for the Seven Stocks
- Arthur Hill, CMT
The Mag7 ETF (MAGS) formed another short-term bullish continuation pattern as it worked its way higher since the triangle breakout in mid September. This report will also analyze the long-term trends, highlight the short-term setups and compare performance for the seven component stocks.
First and foremost, MAGS is in a long-term uptrend with a new high in mid December and price well above the 200-day SMA. This ETF has been in a long-term uptrend since the big surge and breakout in November 2023. MAGS started trading in April 2023 so the 200-day SMA did not start until late January 2024. MAGS fell sharply in July 2024, but held above the 200-day SMA and resumed its uptrend with a new high in November.
The indicator window shows the MAGS/RSP Ratio, which measures relative performance. This line rises when MAGS outperforms the S&P 500 EW ETF (RSP) and falls when MAGS underperforms. MAGS is outperforming the broader market as the price-relative rises and hits new highs.
With MAGS in a long-term uptrend and leading the market, we want to be focused on bullish setups within this trend, such as bullish continuation patterns. Medium-term, MAGS formed a triangle in July-August. This triangle formed within a long-term uptrend and was a bullish continuation pattern. MAGS broke out in mid September and worked its way higher the last five months.
More recently, the ETF formed a flag in October, a pennant in November and another flag here in January. These are short-term bullish continuation patterns. MAGS is breaking out of the flag this week and this signals an end to the pullback and a resumption of the uptrend. Re-evaluation support is set at 53.
As it’s name suggests, the Mag7 ETF (MAGS) has seven stocks and all are up over the past 12 months. The PerfChart below shows 252 day performance with SPY and QQQ up around 27%, and MAGS up around 64%. MAGS is up more than twice as much and leading long-term. Nvidia (+146%), Tesla (+97%), Amazon (+35%) and Meta (+66%) are powering this group with the biggest gains. Microsoft (+13%) and Apple (+15%) are the laggards in the group.
The rest of this report continues at TrendInvestorPro, where we analyze the charts for each of the Mag7 stocks. GOOGL, AMZN and META are leading on the price charts with short-term bullish continuation patterns. AAPL is lagging, but setting up as it hit support and became oversold. MSFT defended support in January and surged to keep its bigger breakout alive. NVDA has moved little since July, but the cup remains half full. TSLA went parabolic into December and finally corrected into January. We will show patterns at work and the key levels to watch in the future.