If you’ve been an owner of the illustrious Magnificent Seven stocks - Alphabet (GOOGL) -), Amazon (AMZN) -), Apple (AAPL) -), Meta (META) -), Microsoft (MSFT) -), Nvidia (NVDA) -) and Tesla (TSLA) -) - your portfolio had a lot to be thankful for so far in 2023.
But could a pullback be in store as soon as Monday?
In this sneak peek from the Action Alerts PLUS investing club, technical analyst Bob Lang explained how the upcoming Nasdaq 100 rebalance could lead to weakness in the major tech players in the weeks ahead.
FULL VIDEO TRANSCRIPT BELOW:
BOB LANG: Yeah, nine days in a row is a solid win streak for the industrials, JD. But they're simply playing catch up to the rest of the market. Now, the Dow Industrials are now up about 6.4% through yesterday's close, much lower than the S&P 500 and the NASDAQ. I'm sure S&P 500 up near about 19% for 2023, NASDAQ up over 44% for 2023. So as we move our way through earnings season, JD, we might see some tech names fall back a little bit as we witnessed this past week with Tesla and Netflix, while industrials step up as they share some optimism for the remainder of 2023.
J.D. DURKIN: So a lot of focus has been paid to the Magnificent Seven. That's the phrase everyone's using the stocks when it comes to this last leg a bit higher. Too much optimism being put behind some of those best businesses in the world. What do you think? We do talk a lot about them.
BOB LANG: Well, I was thinking about something, JD. And I'm glad they coined this name the Magnificent Seven instead of the dwarfs, right? 7 dwarfs? It could have been-- that could have been the name of these names in the NASDAQ. But certainly, it's endless talk of this group. But let's face it, if you've had money in these names in 2023, you're doing pretty well, exceptionally well, as a matter of fact. Fortunately, though, in the AAP portfolio, we have four of these names, not all seven, of course, not Tesla, Meta, or Nvidia. These stocks have been running hot for months. And at some point in time, they will cool down. For the long term, though, these firms are solid. They're dominant in their field. But no doubt, we'll see money rotating out of this group. And it may start Monday with NASDAQ 100's rebalance.
J.D. DURKIN: Absolutely. We're closely following that rebalance there for the NASDAQ 100. Bob, you've been clear you think the earliest time to call a bull market will come in the month of September. It'll be here before you know it. Any change to that thinking, I wonder, as the market digests what's become a bit of a mixed bag of an earnings season. But certainly, a strong start from the banks and some strong names we've had report since then.
