This article first appeared on GuruFocus.
Oppenheimer said the outlook for the Magnificent Seven remains constructive even as the Dow Jones Industrial Average continues to lag. The firm said the group’s biggest names may be setting up for a technical breakout.
Oppenheimer said it is considering trimming some oversized holdings back to a more standard overweight stance after the group’s strong run. Even so, the firm is not calling for less exposure overall, and instead favors shifting capital toward names that appear less extended, including Apple (NASDAQ:AAPL), Nvidia (NASDAQ:NVDA), Alphabet (NASDAQ:GOOGL) and Amazon (AMZN).
Oppenheimer said several mega-cap technology stocks are showing firmer momentum after spending about seven months capped by resistance levels. The firm said that trend suggests buyers may still be willing to back growth stocks, even with weaker action in more cyclical parts of the market.
The Oppenheimer view also points to a widening gap between the Dow and leading technology shares. The firm said that relative strength could mean leadership in the tech sector may broaden further in the months ahead.
