Hi YXI friends,

Welcome to the weekly update of Magnificent 7 stocks. This is a Friday series, in which we comb through the charts of all individual Mag-7 names. Where there has been an earnings report during the week (e.g. NVDA this week), we will also include a deep dive into the earnings review.

To start off, we go through the latest PCE data announced this morning.

Let’s begin!

Table of Contents

• 0. PCE Appears Benign

• 1. Tesla (TSLA)

• 2. Nvidia (NVDA) Earnings Review

• 3. Meta (META)

• 4. Alphabet (GOOGL)

• 5. Amazon (AMZN)

• 6. Apple (AAPL)

• 7. Microsoft (MSFT)

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

0. PCE Appears Benign

We won’t spend too much time on the PCE data today, because the market is not focusing on it. The current market focus is the ongoing capitulation in risk assets on the back of further tariff threats towards China, EU, Canada, Mexico.

Headline PCE & Core PCE

The Headline PCE came in at 0.3% MoM, in line with expectation. This translates to 2.5% YoY. This is a deceleration from December’s 2.6%.

Core PCE also increased by 0.3% MoM, or 2.6% YoY. Again, it is a nice deceleration from December’s 2.9%.

In the December FOMC’s Summary of Economic Projections, the Fed expects 2025 to see 2.5% in both the Headline and Core PCEs. On the back of this, the Fed pencils 2 cuts for the year. We are currently on track, meaning the Fed’s base case scenario for the year is still 2 cuts.

However, if we see meaningful further deceleration from here to 2.2% for each or lower, I would expect the market to price in an additional 2 cuts for the year.

3-month Annualised PCE & Core PCE

In terms of the 3-month annualised pace (i.e. we take the past 3 months’ data and extrapolate for 1 year), both the Headline and Core PCE were stable in January. Again, this is not a bad thing given the prior worries of resurgent inflation.

The true test, however, really comes in April, when the tariff impact start to show up in CPI/ PCE data points more fully.

1. Tesla (TSLA)

This week’s main development for Tesla, the business, has been in China. Tesla appears to have launched its FSD system in China, introducing advanced driver assistance features with the latest software update.

Furthermore, Tesla has begun delivering its updated Model Y in China already, ahead of other markets such as Europe and US.

China is an extremely competitive market, with domestic makers suchs Li Autos, Xiaomi, BYD, and XPeng all making very fancy and reasonably priced EVs. It will be interesting to see if Model Y is able to rescue its declining sales since January.

TSLA Hourly (https://www.tradingview.com/x/jHtYbQqI/)

Sentiment around Tesla has reached a nadir this week following the stock price capitulation.

My original downside target of $310-330 appeared to be too conservative. We saw a one-week bounce from the region, followed by shorts knocking out every single stop down to $275.

This final leg, marked as wave v on the chart, is a very extended wave at 262% extension of wave iii-v. It itself is sporting 5 sub-waves. The 5th sub-wave can go down as far as $269 but doesn’t have to.

It may be my famous last words, but I don’t see the November 2024 gap being filled in this move.

TSLA Daily (https://www.tradingview.com/x/0Hdgirsz/)

Now, zooming out, TSLA is holding right above the danger zone of 0.618 retrace of wave 3 (from the wave 2 low), which is $264. Breaking below this will invalidate my entire thesis, meaning I will need to revaluate the entire count. This is because below $264, wave 4 begins to overlap with wave 1.

Holding this zone in blue, I favour the market to complete a 5 wave rally over the next 2 weeks to confirm the bottom in place.

Looking further ahead, I can see TSLA’s larger degree wave 5 of (3) to reach $600+. This is the 1.382 extension of the length of wave 3 to wave 4. It might seem unlikely now, but neither did the run from 200 to 480 back in 2024.

2. Nvidia (NVDA) Earnings Review

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