It’s the best of times to be a bullish investor. Or is it? As even tech heavyweight FANG stocks can attest, the stock market remains a market made up of stocks. But as the price charts of Facebook (NASDAQ:FB), Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) also reflect, there are plenty of opportunities for bulls and bears to beat the market.
The tech-heavy Nasdaq Composite is enjoying quite the performance in 2019’s fourth quarter. After averting the briefest of bearish seasonal threats in early October, the Nasdaq is up nearly 11.5% from its low. And since the beginning of November, fresh all-time-highs have been reached in eight trading sessions.
Let’s not forget about the other three quarters either. In total the Nasdaq is up by a very impressive 32% in 2019. But in a market made up of large-cap, tech-heavy stocks, similar toast-worthy tallies of bullish wherewithal haven’t been uniform. The performances of FANG stocks in 2019 have been all over the map.
Granted FB, AMZN, NFLX and GOOGL stock are all showing gains on the year. But the buck literally stops there. The better news? On the price charts of FANG stocks today, there’s big-time opportunities for bulls and bears to profit in a market made up of individual companies.
FANG Stocks With Big-Time Opportunities: Facebook (FB)
Facebook is the first of our FANG stocks. FB stock’s weekly chart leads us to the conclusion that investors will be rewarded shorting shares or engaging in a bearish options strategy.
Currently this FANG constituent is trading up against resistance formed by a broken up-channel. This follows Facebook shares having already established a lower-high topping pattern back in July. And with stochastics starting to turn lower in overbought territory, the verdict remains that FB stock is a short.
FB Stock Strategy: My advice is to short or gain bearish exposure to FB stock beneath this week’s low of $193.05. One caveat for this strategy is shares must remain below estimated channel resistance of $201.50 in the coming weeks.
It stands to reason that a sensible exit should use $201.50 for closing bearish risk. If this FANG stock heads lower, I’d set an initial price target of $175 for taking partial profits.
Amazon stock’s weekly view is interpreted as a situation which can be traded for big gains by either bulls or bears.
Similar to people, charts change. One day’s advantage which favors bulls can sometimes turn quickly into a situation more supportive for bears. But once in a while price patterns form which should be traded on either a breakout or breakdown. That’s what’s taking shape in this FANG stock right now.
Over the past few months AMZN stock formed a bullish higher-low and double-bottom pattern. This pattern was enough for investors to consider buying shares above angular resistance of $1,818. But a failure to clear this level is looking more and more like a bear flag backed by a bearish crossover in stochastics.
AMZN Stock Strategy: As described above, the bears have the edge in today’s market. However, I wouldn’t count the bulls out. Either way, price confirmation to buy or short is needed. To go long or bet against this FANG stock, Amazon shares need to move out of the current congestion pattern.
Netflix is the third of our FANG stocks. The monthly price chart is pointing to a correction which has finished and a bullish story line moving forward. This week’s price action has reaffirmed a brief post-earnings confirmation of Netflix’s higher-low, double-bottom pattern.
The bullish pattern is supported by the 50% retracement level. And with shares once again back through the September high of $301.55 and stochastics supporting a purchase, this second attempt entry looks solid. If we’re right, new highs in 2020 are in store for investors subscribing to this outlook.
NFLX Stock Strategy: Buy this FANG stock today. To contain downside, I’d suggest using the November low. Likewise, taking initial profits between $375 and $425 looks equally smart.
Alphabet (GOOG, GOOGL)
Like Netflix, Alphabet stock is a buy on the monthly chart right now. On the other hand, GOOGL stock is a breakout play.
Shares of Google have broken a potentially bearish triple-top formation this month, but remain within arm’s reach of a picture-perfect breakout through $1,300. What’s more, stochastics are trending nicely higher and remain in neutral territory.
GOOGL Stock Strategy: Buy Alphabet stock today. I’d advise using a stop below $1,250. That’s slightly beneath the November low and looks like sufficient leeway for this type of play, especially since the market feels invincible. Still, if this bull continues to have legs, this failed pattern breakout should conservatively see GOOGL stock trading towards $1,500 in the months ahead.
Investment accounts under Christopher Tyler’s management do not currently own positions in securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.