Is it too late to get in on the Super Six? We addressed that question back in late January to help investors who didn’t own shares find some key entry points. Apple and Alphabet pulled back to the support levels we highlighted and have since rallied strongly. Meta Platforms got down close before it was off to the races again. Nvidia , Microsoft , and Amazon never looked back. So, six months later, with Big Tech running into some selling recently, we’re asking the same question and looking at how to determine these levels with some simple technical analysis. Since this exercise is only a snapshot in time in the ever-changing market, we want to help Club members learn to apply these principles when deciding what is right for their individual portfolios. Consider your risk tolerance, investing horizon, and the size of what you consider a full position so that you can scale in accordingly. Lessons learned, things to consider In some cases, we were too cautious back in January, in others we were spot on. But there is no guarantee we will see any of these levels, just as there is no guarantee we won’t see prices below these levels. So, we must always look to leave room for buys that can help us lower our overall cost basis. In the long run, stocks follow the underlying fundamentals of the businesses they represent. Suppose you believe in the long-term fundamentals, as we do. In that case, you might consider putting on a starter position despite what the charts say — if only to keep yourself emotionally in check should the stocks not fall to the levels noted below. As we always say, we are fundamental investors. We believe that technical setups work until they don’t, and fundamentals work until they change. We love all of these stocks based purely on their businesses. They are all stocks worth owning. But where are the possible pullbacks for new investors to get in? That’s what we’re aiming to illustrate. Let’s take a look at what the charts are telling us. Microsoft Potential entry points: $430, $420, $400, and $390 As seen in the chart, $430 was previously a level of resistance – meaning the stock was met with selling pressure at this level (the top black horizontal line). In technical analysis, the polarity principle says that prior resistance, once broken, becomes support. It provides a good starting point at $430 since it only represents roughly a 5% pullback from recent all-time highs. Should the stock fail to hold at $430, we would then look to at $420. As we can see, the 50-day moving average (the green line), a key trend level that many technical analysts watch, comes into play at roughly $421. There is also an uptrend (the pink line) going back to the beginning of 2023 that comes into play at around $415. Somewhere in this area is where we would next look for support. Below that, we would wait a bit more and see if the stock comes down to around $400, which represents a slightly greater than 10% pullback from all-time highs. As we can see, $400 served as a key support level three times early this year (the second black horizontal line). Should all the above levels fail, we would get interested at $390. For starters, this represents the 200-day moving average (the maroon line), which is a significant level for technical analysts concerned with the long-term trend. From a fundamental perspective, that level would bring the stock to its five-average forward price-to-earnings valuation of about 29 times based on estimates for fiscal year 2025. Alphabet Potential entry points: $171, $160, and $148 Around $171 is where the 50-day moving average (the green line) comes into play. So if the thinking is we see a small pullback before resuming the move higher, it’s a good spot to get some fresh money to work and represents a roughly 5% pullback from all-time highs. Should that level fail, we would look to $160 (the black horizontal line), which as we can see, served as a resistance until the stock was able to break out on a strong earnings release. Here, we are again applying the polarity principle and using prior resistance as the new support level. Below that, we’re looking to about $148, where we see both the 200-day moving average (the maroon line), as well as an uptrend (the pink line) that started back in January 2023, come into play. Amazon Potential entry points: $183, $166, and $162 Arguably, members with no exposure could take a stab at shares right here and now as the 50-day comes into play at around $183 (the green line). We’re looking at a stock with a clear-up trend, consolidating at current levels. Consolidation is a positive. It means we can work off overbought conditions before taking another leg higher, which we would expect to see should we get a positive update as we enter second-quarter earnings season. From here, we would be watching the low to mid-$160s area. As we can see, a few factors come into play here. We have the 200-day moving average at about $162 (the maroon line), and an uptrend that started in early 2023 (the pink line) comes into play there as well. It’s also the level we were seeing some resistance at before earnings came in strong enough to warrant a breakout. We see that $166 has proven a key support level (the top black horizontal line) ever since that post-earnings breakout. Meta Platforms Potential entry points: $480, $465, $450, and $415 $480 gets us right to about the 50-day moving average (the green line) and would represent a roughly 9% pullback from the all-time closing high set on April 5. The next level that pops out to us is $465, which is where the uptrend starting in February of 2023 comes into play (the pink line). Should that fail, look to the $450 level (the top black horizontal line). Though this level was breached on the back of the last earnings report, it was quickly reclaimed and appears to be a level at which we’ve seen a pickup in volume in the past, indicating that we could well see support come into play. This level represents a roughly 15% decline from the all-time closing high. We would be watching $415 (the second black horizontal line) as we saw some resistance here before the stock broke out on the back of a solid fourth-quarter earnings report and is where the 200-day moving average (the maroon line) comes into play. A move to this level would represent a roughly 21% decline, putting shares in bear market territory. Nvidia Potential entry points: $120, $110, and $100 Just below Tuesday’s close, around $120, that’s a battleground level (the top black horizontal line). As we can see, following a strong run on the back of the last earnings report, shares of Nvidia were consolidating for about a week at this level before making another swift move higher to $140. We’re now about 10% off all-time highs with Tuesday’s bounce. From here, we’re looking at $110, which puts you at right around 40 times this year’s earnings estimate, in line with the stock’s five-year average valuation on a fundamental basis and at about 30 times 2025’s numbers, which are going to start to come more into focus once we get passed second-quarter earnings season in another month or two. This was also a level of support and consolidation (the middle black horizontal line) following the breakout we saw on the back of the most recent earnings release, which saw many analysts on the Street raise estimates and their price targets. At this point, shares would be down about 21% from all-time highs. After that, expect $100 to be a major battleground level (the bottom black horizontal line) as it’s a nice round number, right above which we see the 50-day moving average (the green line) come into play as well as an uptrend (the green line) that started at the beginning of 2024. Apple Potential entry points: $208, $200, and $190 Again, we’re looking at a pretty interesting level at $208 (the top black horizontal line) as shares have already pulled back about 5% from intra-day all-time highs and twice bounced off the $207-$208 level on elevated volume. Fundamentally, it’s also important for those without exposure to consider if it makes sense to try and grab shares at lower levels or get a little on their book now that we have seen Apple Intelligence (Apple’s generative AI strategy) and know that to use it requires most people to upgrade their devices. We still have a big iPhone event ahead of us (in the fall), which may well provide even more reason to upgrade. From here, we would call out $200 (the bottom horizontal black line), which as we can see was a key level of resistance before shares broke out on the back of AI announcements at Apple’s annual Worldwide Developers Conference (WWDC) earlier this month. Again, we are looking for the polarity principle to come into play here. From there, we would wait to see what happens in the $185 to $190 region, which is where the 50-day (the green line) and 200-day (the maroon line) moving averages start to come into play. Given the fundamental AI driver of a strong upgrade cycle, we think both levels will prove strong points of support. Bottom line Hopefully, this has provided some food for thought for those looking to initiate a position in any of these best-in-class companies. And for those sitting on large gains or thinking about when to book a profit, you can always conduct a similar analysis the other way, looking for key resistance levels (and asking yourself these questions ) as possible areas to lighten up or even sell calls against larger positions, something we previously discussed in our series on options . Though, again, be sure to keep fundamentals and the principles of portfolio management in mind as you study the charts, be it from the perspective of when to buy, or when to sell. (Jim Cramer’s Charitable Trust is long AAPL, AMZN, GOOGL, META, MSFT, NVDA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. 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HANGZHOU, CHINA – JUNE 3, 2024 – The NVIDIA logo and the Apple logo are pictured in Hangzhou city, Zhejiang province, China, June 6, 2024. On June 5, Eastern time, Nvidia’s stock market value exceeded $3 trillion, officially surpassing Apple’s market value and becoming the world’s second largest technology giant by market value. It is worth noting that in just over 3 months, Nvidia’s market value soared from $2 trillion to $3 trillion. (Photo credit should read CFOTO/Future Publishing via Getty Images)
Cfoto | Future Publishing | Getty Images
Is it too late to get in on the Super Six?
We addressed that question back in late January to help investors who didn’t own shares find some key entry points. Apple and Alphabet pulled back to the support levels we highlighted and have since rallied strongly. Meta Platforms got down close before it was off to the races again. Nvidia, Microsoft, and Amazon never looked back.
So, six months later, with Big Tech running into some selling recently, we’re asking the same question and looking at how to determine these levels with some simple technical analysis.
