By Doug Busch
The so-called "Magnificent Seven" remain central to the broader market's direction, making them difficult for investors to ignore.
Given their outsize weight in major indexes and influence on overall sentiment, shifts in these names often set the tone for equities more broadly. Closely monitoring their price action can therefore offer important clues about the market's next move.
The Roundhill Magnificent Seven ETF gained 4.6% on Tuesday, helped by a combination of factors. It was some oversold buying, some short covering, and options expiration. That was the strongest daily showing since May 12, 2025, gaining 5.8%, and the fund never looked back (it is important to note the ETF was already 24% off its lows).
Price action would be hard to ignore as Tuesday's small gap completed a bullish island reversal. Outsize moves like Tuesday's are hard to trust, especially since the fund remains well below its 200 day simple moving average. However, this move gives us a clear line in the sand to play against on the long side now.
Two names appear particularly well-positioned based on a risk/reward profile.
Microsoft, a software behemoth and the world's fourth-largest company, has suffered and remains 33% below its most recent 52-week high. Before Tuesday's 3% advance, the stock fell in eight of the prior 10 sessions and all 10 closed at lows for the daily range, showing persistent selling pressure.
The stock's monthly chart shows how influential monthly candles have been. Over the last 10 years, the upward sloping 50 month simple moving average has been touched only twice previously, and both instances provided support before resuming the uptrend.
In late 2022-early 2023, it recorded a couple of bullish hammers and did the same last April. March now has a six-month losing streak but is touching the line once again and notice it filled the gap from last April. Peaks occurred with doji candles in November-December 2021, and another one last October that was preceded by a bearish dark cloud cover in August. Presently, this is a clear area that the stock must hold. One can enter here and look for a move toward $450 later in the second half, a 22% gain from current prices. Remain bullish above $345.
Microsoft was trading around $370 Wednesday.
Tesla, an electric vehicle player, trades 26% off its most recent 52-week high and is lower by 17% year to date. It is still 52% higher over the past year and is on a current six week losing streak, its first since an eight week skid between last January-March. This week, leading into Wednesday, has formed a bullish hammer.
The stock's daily chart shows it lagging consumer peers since last December as seen on the ratio chart against the State Street Consumer Staples Select Sector SPDR ETF. That weakness coincided with a bearish shooting star on Dec. 22 at the very round $500 number which was also a double top with the Dec. 18, 2024, session.
I believe the completion of Tuesday's bullish morning star will start a double bottom pattern. Notice how it has now retested a former symmetrical triangle breakout at $350 from last September. One can enter here and if strength materializes add to above a double bottom pivot of $436.45. Look for the stock to travel toward $500 later in the second half, which would be a 35% gain from current prices. Remain bullish above $350.
Tesla was trading around $376 Wednesday.
Doug Busch is the senior technical analyst at Barron's Investor Circle . His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
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(END) Dow Jones Newswires
April 01, 2026 11:50 ET (15:50 GMT)
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