The mega-cap "Magnificent Seven" stocks didn't earn their nickname by chance. These market heavyweights have carried much of the load during this year's equity rally and this trend may accelerate as 2025 winds down.
The Roundhill Magnificent Seven ETF is edging out the Nasdaq Composite year to date, with a 16% gain versus the index's 15%. This narrow outperformance speaks to broad participation across the technology sector. But if seasonal weakness begins to perk up, perhaps combined with a less dovish than anticipated Federal Reserve this week, investors can be expected to rotate defensively back into the Mag 7. Here's a closer look at the names that appear most technically compelling right now.
Microsoft, the third-largest holding in the iShares Expanded Tech Sector ETF , is down 8% from its all-time high after a sharp earnings-related reversal on July 31. However, the stock rebounded 3% last week to snap its first five-week losing streak since Q1.
MSFT is holding firm at the very round $500 level ( an area I wrote about in early August), a successful retest of the prior bull flag breakout from early July. Bulls will take comfort in the stock's resilience, particularly after the bearish engulfing candle on Sept. 5 failed to gain traction. Last Monday's doji candle suggests the selling pressure is abating, potentially to be replaced with the formation of the right side of a cup base. If momentum builds, a move toward $550 by year end is a logical target.
Microsoft movement suggests the formation of a cup base.
Tesla rallied on Monday morning on news that CEO Elon Musk bought the stock for the first time since early 2020. The stock already touched my $425 year-end target, sooner than expected, and is looking to build on an impressive 18% gain over the past two weeks.
The weekly chart suggests a potential path toward the very round $500 level by the end of the year. Notice how Tesla backed off sharply near that mark in the final weeks of 2024, including a notable intraweek reversal to close $67 off its highs during the week ending Dec. 20. This was followed by a doji candle, signaling buyer exhaustion. But this area now serves as the upper rim of what could be a 10-month cup base formation. If Tesla can break above that resistance zone, a longer-term move toward $800 by the end of 2026 may be in play.
Tesla forming a 10-month cup base.
Meta Platforms is having a standout 2025, almost doubling the performance of the Nasdaq. While the stock has tracked the index over the last month, down 3%, this appears to be a prudent pause following a strong move off the April lows.
Technically, round-number theory has been a factor. Meta bounced decisively off the $500 level in Q2 and recently traded between the $700 and $800 figures. The stock has formed a double bottom but investors may want to wait until it crosses above the $766.61 pivot handle before taking long positions. It nearly closed the July 30 gap and is now holding above $750, a level that acted as resistance in both February and June. Should this consolidation resolve higher, a move toward $1,000 by Q1 2026 is well within reach.
Meta is holding above previous resistance levels.