By Lauren R. Rublin
Technical analysis, in its simplest form, is the study of price trends. It can be applied to individual securities, funds and indexes, and other assets, and over all charted time frames. "We try to understand not only which way trends are going, but whether they are likely to mature," explained Katie Stockton, founder and managing partner of Fairlead Strategies, a Connecticut-based research firm and registered investment advisor, in the April 6 episode of Barron's Live , our weekly reader call and podcast.
Stockton, who holds the Chartered Market Technician, or CMT, designation, uses a variety of "technical" tools, including bar charts; MACD, or moving average convergence divergence indicators; and stochastic oscillators (more about them below) to analyze stocks, indexes, commodities, and more. "We classify indicators as trend-following or momentum gauges, overbought and oversold metrics, and relative strength inputs," she said. "Those three categories together form our worldview on the markets. All are relevant at all times, but we might weight a momentum gauge a bit more in a trending market, and an overbought or oversold gauge more in a range-bound market."
After Barron's Live, we asked Katie to address several listener and other questions -- about the Magnificent Seven stocks, the Dow Jones transports, and the Cboe Volatility Index -- that time didn't permit during the call. The questions, and her answers, are below.
Barron's: Please provide a technical assessment of the Magnificent Seven stocks, and the Mag Seven relative to the S&P 500 index.
Katie Stockton: The Magnificent Seven stocks peaked relative to the S&P 500 index (SPX) last November. The relative downtrend has been associated with a weakening tape, given the large footprint of the megacap stocks in the SPX, with a current weighting near 32%. We would respect the intermediate-term downtrend that applies to the Mag Seven versus the SPX and to most stocks in absolute terms.
Apple is in an intermediate-term trading range within the context of its long-term uptrend. A neutral bias is warranted while watching key levels for breakouts or breakdowns. Apple has trendline resistance just above $270 and support near $244. [Support and resistance levels are prices at which buying and selling pressure is expected based on historical trading.]
Amazon.com's cyclical uptrend shows a significant loss of long-term momentum, which supports a correction lasting several more months. The momentum downturn increases the risk of a failed rally and breakdown below long-term support near $202. Secondary support is near $166.
Meta Platforms reversed its cyclical uptrend with a breakdown in February, supporting a deeper correction before a major low is established. Support is near $522, and secondary support is near $439. Initial resistance is at the breakdown point near $638.
Alphabet has a long-term uptrend in place in both absolute terms and relative to the SPX. A downtick in long-term upside momentum suggests a slower pace for the uptrend compared with last year. Resistance is near $349, and support is at the 200-day moving average, currently near $267.
Tesla is testing long-term support near $350. A decisive breakdown would be a bearish catalyst supporting a deeper correction in the months ahead, targeting long-term trendline support near $264. Resistance is at the 200-day moving average, near $397.
Microsoft is oversold in absolute and relative terms following a steep downdraft, so it may have less downside than the rest of the Magnificent Seven. There are no positive technical catalysts on the chart, but downside momentum is starting to moderate. Major support for Microsoft is approximately $350, defined by the 2021 peak and April 2025 low.
Nvidia is range-bound within the context of its secular uptrend, with deteriorating long-term momentum. Initial support for Nvidia is near $165, defined by previous lows on the chart going back to July. Nvidia has resistance from year-to-date peaks near $194. A neutral bias is warranted while the range is in place.
The Dow Jones Transportation Average rallied more than 50% in the past 12 months, to a recent 20,450. What does the chart suggest will happen next?
The Dow Jones Transportation Average (TRAN) is in a cyclical uptrend with positive long-term momentum. Compared with the SPX, the TRAN has outperformed for several months. The recent push higher shows signs of short-term exhaustion, but the uptrend appears healthy from an intermediate-term perspective.
The TRAN needs to hold above its rising 200-day moving average, which puts support near 17,000. There is no resistance with TRAN at all-time highs. This year's breakout above resistance from 2021 allows for a long-term (one to two year) projection of about 23,700, based on the uptrend trajectory.
The Cboe Volatility Index is elevated year to date, although volatility has fallen sharply from year-ago levels right after President Donald Trump first unveiled his tariff plan. Do any charts point to promising volatility trades?
Our research suggests the equity market has moved into a high-volatility regime, with the Cboe Volatility Index (VIX) establishing a higher floor than in the prior cycle. Long-term momentum has shifted, supporting a more prolonged period of elevated volatility rather than a quick return to calmer conditions. With this in mind, sharp rallies in the equity market should be viewed not as normalization, but as an opportunity to "buy" volatility on temporary easing in stress.
Technical analysis shows what has happened. What is the best technical indicator to focus on if you want to try to catch the low in a stock?
Overbought/oversold indicators help identify peaks and troughs. We use multiple indicators but rely most on the stochastic oscillator for timely indications of important highs and lows. [A stochastic oscillator is a technical indicator that helps identify overbought and oversold conditions by comparing a security's closing price to its price range over a set period.] We look for upturns from oversold territory (less than 20%) before increasing exposure. Combining the stochastic oscillator with support and resistance improves results.
Thanks, Katie.
Write to Lauren R. Rublin at lauren.rublin@barrons.com
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April 10, 2026 16:28 ET (20:28 GMT)
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