In the late stage of a stock bull market fewer and fewer stocks participate in the rally. On 01/26/24 only two of the seven stocks driving the U.S. stock market made new highs.
The seven stocks driving the U.S stock market are called the “Magnificent Seven” and as “Investor’s Business Daily” writes.
“Due to their outsized market capitalizations, Magnificent Seven stocks hold a disproportionate influence on the market-cap weighted Nasdaq composite and S&P 500 indexes.”
The Magnificent Seven stocks are as follows.
Apple Inc. (AAPL)
Microsoft Corporation (MSFT)
Alphabet Inc. (GOOGL)
Amazon.com Inc. (AMZN)
Nvidia Corporation (NVDA)
Meta Platforms Inc. (META)
Tesla Inc. (TSLA)
The two stocks that made new highs on 01/26/24 are AMZN and META.
The daily AMZN chart courtesy of Trading View illustrates its action.
Both RSI and CCI have bearish divergences implying a decline could come soon.
The daily META chart shows what’s happening.
Momentum for META is more bullish because there only the CCI has a bearish divergence. However, when the CCI is diverging off RSI at a maximum high in the overbought zone, it could indicate a coming decline.
The next three strongest stocks in the Magnificent Seven are.
MSFT – one day off its high.
GOOGL – one day off it high.
NVDA – two days off its high.
These marginally lower stocks with AMZN and META, could be dubbed the “Magnificent Five”.
Two stocks are not looking “Magnificent”.
AAPL is 4% below its high made on 12/14/23 and appears to have just completed a secondary peak made on 01/24/24.
TSLA is the most bearish, it’s 55% below its top made in November 2021 and is down 31% from it’s high on 12/28/23!
If the Magnificent Seven stocks decline in unison, there may not be much to hold up the broader U.S. stock indices.
Four Dimension Trading 