I decided to take a look at the FAANG stocks to see which ones are experiencing damage (duds) and which ones are continuing to show internal strength despite the S&P 500 stalling before reaching all-time highs. There are definitely some winners and losers. I must say that, overall, there are bearish chart patterns and deterioration showing up even on some of the darlings. Since most of us carry all or some of these stocks (Full Disclosure - I own AMZN & NFLX), caution is warranted on all of these right now.
Facebook (FB) = Dud
Facebook took a huge hit today and moved from what could've been "darling" to a definitely "dud". The short-term rising trend (blue) was broken decisively today. On the bright side, the longer-term rising trend is still intact... barely. FB closed below both its 20/50-EMAs. The PMO has been on a SELL signal since the most recent trading channel began. The RSI fell out of bed yesterday. While this could be a possible entry point for a big-name stock, I would want to wait until price gets back into the trading range. The next level of strong support is at $200.
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Apple (AAPL) = Darling:
Despite a rising wedge, Apple has continued to outperform. Its rising trend is intact and it has a little bit of room to fall lower without compromising that trend. The PMO has been stuttering on its way into extremely overbought territory. We have another "stutter" with today's tick down on the PMO. At this point, AAPL looks okay, as the RSI is still above 50 and OBV rising bottoms confirm the current uptrend. The next level of support is at the February high around $330.
Amazon (AMZN) = Darling
I did an interview with MarketViews.TV this morning (It will be published tomorrow and sent to our free email list. Sign up from our homepage to get on the free list) where Ike Iossif discussed how Amazon can't continue to make money if 20% of the population is unemployed. This completely consumer-driven company needs customers with an income to keep it going. Of course, many of us have been waiting for the economy to intervene in this market rally for some time. In the meantime, it is still a darling. The rising trend is in place and, like Apple, there is room for it to move lower and hold that trend. As with many, there is a bearish rising wedge in play and the PMO has turned lower. The RSI is still healthy and, as long as it can hold the 20-EMA, I think you can stick with it.
Netflix (NFLX) = Darling
Today's drop wasn't pleasant for my portfolio, but at this point I'm holding it. My line in the sand will be the 50-EMA. If it doesn't hold that, I'd prefer to exit and reenter when it reaches strong support at $400. The RSI is failing but is still positive. The PMO topped, but that isn't surprising given the deep decline. I also highlighted a negative divergence with the OBV. There is weakness here, so I'm keeping on my toes.
Google (GOOGL) = Dud:
I think like FB, it's pretty easy to look at this chart and call it a "dud." Like FB, Google had been consolidating sideways, but lost its rising trend earlier this month. In the meantime, it has formed a bearish double-top which has executed to the downside. Based on the chart pattern, the minimum downside target is around $1300, where there is 200-EMA support. GOOGL has now got an RSI below net neutral (50) and a PMO that is accelerating lower. Notice the very high volume that came in today. If there is a bright side, it would be the giant decline on lots of volume - it could turn out to be a selling exhaustion. However, I'm of the mind that it will test support at $1300 before it turns back up.
Conclusion: The FAANG stocks obviously drive the market, so it is important to keep an eye on these market movers. Weakness here means weakness for the market as a whole. Right now, the FAANG picture is mixed, with some holding up better than others. What I did note is that there are bearish characteristics to ALL of these charts, so consider this a caution flag. I put a coupon code in today's article that I'd love to see you redeem, especially if you're not familiar with DecisionPoint.com! I give out 60 stock picks a month in DP Diamonds for only $25/mo (price will be going up significantly soon, so lock it in!) and the DP Alert market newsletter is there for you everyday with Carl writing the "Weekly Wrap." Carl also has THREE annotated ChartLists that he keeps up to date DAILY! At the very least, you should get on our free email list here.
Happy Charting! - Erin
Technical Analysis is a windsock, not a crystal ball.
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