Or sellers take control and change the market’s character, and we start looking for stocks to sell.
When markets reach an inflection point, it’s always a good idea to check in on the biggest names.
These are the stocks investors want to own. The ones hedge funds anchor their portfolios with.
These are the bellwethers and the roadmap for everything else.
The Roundhill Magnificent Seven ETF $MAGS is probably the best way to track them.
After a 17% pullback from the highs, price is now testing its breakout level from last July.
This is a logical place for buyers to step in and repair some of the damage. But more importantly, a cluster of key technical levels are stacking up here.
Let’s break it down:
Polarity level – former resistance turning into support.
VWAP from ETF inception – an institutional level of interest.
200-Day Moving Average – level of interest for trend following models.
Upward trendline – defines the current rate of trend.
All of these converge around the 50 level, making it a critical zone of support.
If price holds, the uptrend remains intact and the bull market remains alive.
However, if it fails, it will mark a major shift in character and a fresh leg lower from these names will begin.
This is the line in the sand. How the market reacts here will set the tone for what comes next.
If we lose these key names, it’s hard to imagine the rest of the market holding up.
I think it's time to tighten up our stop levels and stay cautious until the data proves us wrong.
