What are the odds that the Round Hill Magnificent Seven ETF (MAGS) ETF can regain its leadership position?The company's holdings haven't been forgotten over the past few weeks, but most haven't made much progress. Like most regions, MAGS experienced a strong pre- and post-election rebound, rising 9.8% between Tuesday, November 5th and Monday, November 6th. Although still young, this was the best five-day move in its history. It's understandable that the sample size is small, but we've seen some large 5-day runs in the past. Specifically, since the ETF's inception in April 2023, there have been five moves of at least 7% in the past five days. This led to further increases in short-term profits three times (November 2023, February 2024, and late September 2024). It hit short-term trading highs twice (in July 2024 and August 2024). Needless to say, buying intent eventually returned after both of these periods, but the immediate risk-reward wasn't the best. This is also the third time MAGS has risen at least 7% in five days to new highs. The last time it happened was in February and July of '24. As I explained earlier, after these two occasions, subsequent price trends were completely different. Testing Key Chart Patterns Moving on to the current trading environment, MAGS has yet to prove that it can take advantage of the last (and largest) 5-day burst. Since Nov. 11, the ETF has declined 10 out of 12 days (including Wednesday's action) and endured four declines of at least 1%. Again, this is not bullish price action and MAGS has not broken below the major support level yet, but it is close to it. An immediate hold would keep the ETF within the potential bullish pennant formation shown. This is important given that MAGS has recently proven capable of taking advantage of short-term bullish trading setups. It has been held twice so far, in September and October. Components So how can MAGS right the ship and break out to new highs again? Well, there are seven places we can look for guidance. Its seven huge holdings. Below is the daily relative chart of each component with MAGS. As you can see, the chart has recently spread across the map. First, there's the leader. The recent spike in TSLA has also prompted a parabolic move for MAGS. It is fate that the speed will be slow. In fact, NVDA's relative burst this past June is very similar to exactly what TSLA did. Since then, NVDA/MAGS has zigzagged wildly and is currently testing an important uptrend line from the April lows. It wouldn't be too surprising to see TSLA/MAGS end up in something like that in the near future. AAPL, MSFT, META, and GOOGL have clearly underperformed MAGS in recent months. AAPL/MAGS has been the best of late, rallying considerably from relative lows. MSFT/MAGS really stands out (for all the wrong reasons) given its continued downtrend since last spring. Since summer, only AMZN has matched MAGS, as shown by the flat relative line. The bottom line is that MAGS requires the support of most components to maintain its buoyancy. The remaining five will need to do a better job going forward, as NVDA's destabilization and TSLA extension are still short-lived. The latest potential bullish pattern in MAGS could come into play if we see the necessary rotation among the giants playing out. If not, you will need to reorganize your space again. Disclosure: (Long MAGS ETF) All opinions expressed by CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, its parent or affiliate companies. Also previously by CNBC Pro contributors on television, radio, internet or another medium. The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any securities or other financial assets. The Content is general in nature and does not reflect any individual's unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
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