Following Nvidia Breakout, This Big Tech ETF Could Be Next
All eyes and thoughts are with Florida today as Hurricane Milton rips through the heart of the state. Recovery has barely begun in western North Carolina and the surrounding areas following Hurricane Helene, but that won’t stop Mother Nature.
It’s been a rough stretch for the Southeastern United States. The overall economic impact won't be known for some time, but it doesn’t appear material. That’s easy to say in the big picture, but the impact on the families and small businesses in the area has been and will be devastating, and I don’t want to sound dismissive. The economic impact on the southeast will be enormous.
Unfortunately, the headlines will quickly shift away from the recent natural disasters to the upcoming election, which remains too close to call.
Election uncertainty historically causes the markets to remain on the conservative side of investing, but with both candidates seeming to have policies that are approaching similarity to each other, the markets may choose the conservative path. I’d like to believe the recent position changes hold more centrist, but my faith in politicians runs as deep as my faith in Hurricane Milton missing Florida.
Although the market strength has broadened, I can’t cast aside the Magnificent Seven. Nvidia (NVDA) broke out on Tuesday, and I believe the market has priced in the near-term concerns regarding Alphabet (GOOGL) .
While Nvidia broke out, the Roundhill Big Tech ETF MAGS hasn’t broken out as of this writing. The long-term full stochastics indicator has been trending higher for the past two weeks while the price has remained in a trading channel. We don’t have a lot of history on MAGS, but this setup has led to strong breakouts over the following months the few times it has occurred.
Traders will want to see the ETF close above $48, although aggressive traders may chase it earlier. If the breakout plays out like it has in the past, waiting for the extra $0.50 move higher for a stronger confirmation won’t reduce the profit potential much. If MAGS closes under $46, I would be on high alert. Any close under $45 would immediately stop me out of a trading position if I had one.
At the time of publication, Byrne had no positions in any securities mentioned.