The seven biggest tech names, often called the Magnificent Seven, are no longer shining. The Roundhill Big Tech ETF (MAGS) is down about 4% for the year, far behind the S&P 500.
Big Tech Starts to Slip
After reaching a high in mid‑May, the big‑tech stocks fell into correction territory. Apple dropped about 7% from its 52‑week high. Meta and Microsoft each fell roughly 30%.
Even Alphabet, the newest member of the Dow, is down 14% from its recent peak.
Nasdaq Volatility Rises
The Nasdaq‑100 volatility index (VXN) is close to a 14‑month high. This index moves faster than the more‑known VIX and is now being driven by the tech slowdown.
Technical Signs for MAGS
MAGS has slipped below its long‑term 200‑day moving average, a bearish clue. However, the line still slopes upward, which gives the bulls a small hope.
A short‑term 50‑day average stays above the 200‑day line, so a full “death cross” has not happened yet.
Two price gaps appear near $62 and $58.30. Traders often watch these gaps as possible downside targets.
Momentum Is Fading
In mid‑May the RSI climbed above 70, confirming the rally. The price then broke the record but fell back below the previous high, turning the breakout into a false move.
Today, heavy buying around $70 shows that bulls still have some strength, but the momentum is weaker.
Seasonal Help for Tech
Historically, the first half of July has been very bullish for large‑cap tech since the 1950s. After July, the market often becomes choppier, especially in an election year.
We might see MAGS drop to fill the first gap and then test the second one near $59, which matches the 38.2% Fibonacci level of the prior rally.
Look Beyond the Mega‑Caps
While big tech fights a strong dollar and high Treasury yields, other areas are doing well. International stocks, small‑cap U.S. stocks, and some REITs are showing strength.
The Russell 2000 recently broke the 3,000 level, and the Vanguard FTSE All‑World ex‑US ETF (VEU) is in a long‑term uptrend.
Earnings Season: Watch the Price, Not Just the Numbers
Five of the seven mega‑caps report earnings in late July. The real test will be how the share price moves after the reports, not just the earnings figures.
If prices keep falling, a defensive large‑cap position could be a safer play as we head toward the election cycle.
Bottom Line
The Magnificent Seven are under pressure and have entered correction territory. Volatility is rising, and the QQQ ETF shows a bearish double‑top.
Traders may look for short‑term opportunities in these stocks, but they should also explore other sectors that are performing better in the current market environment.
Disclaimer: This article is for educational purposes only and does not constitute financial advice.
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