A very bullish Wall Street continues to stick it to last month’s menacing bear market. But are today’s headlines and price action still worth buying, selling, or holding off on? In a market made up of stocks that depends on where investors look. And when it comes to the monthly charts of large-cap, technology FANG stocks, it’s all of the above.
It wasn’t long ago that Wall Street was looking very different. The novel coronavirus and Covid-19 pandemic turned a historic bull market upside down in record-breaking style. And with global economies coming to a screeching halt, a vicious correction-turned-bear market wasn’t entirely without cause, either.
But a flattening of the Covid-19 curve, trillions of dollars of stimulus money, and an over-the-top fearful low, which spawned a meaningful bottom and a resurrected bull market with gains of about 30% in the S&P 500, have many investors once again interested rather than sickened by their 401(k)’s.
Now with new details on the re-opening of the American economy in the coming weeks and upbeat coronavirus-busting drug news from Gilead Sciences (NASDAQ:GILD), where do we go from here? In Friday’s market, investors might be thinking ‘to the moon.’ The broader averages are up roughly 2% and hitting narrow, fresh bull market highs.
- Facebook (NASDAQ:FB)
- Amazon (NASDAQ:AMZN)
- Netflix (NASDAQ:NFLX)
- Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL)
But with those indices also squaring off against key resistance and overbought conditions, today’s buy, sell, and hold-off decisions are encapsulated in FANG:
FANG Stocks: Facebook (FB)
Source: Charts by TradingView
FANG stock constituent Facebook is going along with Friday’s cheerful market bid with similar gains of around 2.15% on the session. Unlike a couple of its peers, the social media giant is likely facing some advertising challenges in the near-term. Still, for people committed to social-distancing best practices, using the company’s online platforms lends itself to obvious user growth.
Technically, investors may be in agreement with the latter bull case. As the broader market cracked below 2018’s ubiquitous corrective low in March, FB stock managed to form a higher low monthly hammer candlestick within its existing uptrend. That’s bullish leadership.
Right now and with April shaping up as an inside candle pattern and stochastics pointed down in neutral territory, I’d hold off on buying Facebook. I’d be a buyer of this FANG stock on bullish price confirmation in May and contingent on a supportive stochastics crossover.
Amazon (AMZN)
Source: Charts by TradingView
Shares of Amazon are under modest pressure Friday by about 1%. But the “A” in “FANG stocks” has been a true market leader off and on the price chart during the coronavirus. From supplying necessary and some likely less critical goods to families and businesses, to entertainment and cloud services, Amazon has been instrumental for many of us during the imposed lock-down.
Technically, Wall Street has responded to Amazon’s importance by sending shares to fresh all-time highs out of a previously failed, large-corrective base. The bullish price action has also set AMZN stock’s capitalization beyond the $1 trillion mark. Only tech giants Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) sport larger valuations.
Currently and with this FANG stock obviously firing on all cylinders, but shares slightly extended out of the recent breakout, Amazon is a solid pullback candidate to buy on any forthcoming price weakness in shares into a key support zone from roughly $2,000 – $2,200.
For those with existing and obviously profitable positions, trimming that stake in anticipation of profit-taking can’t be faulted.
Netflix (NFLX)
Source: Charts by TradingView
Shares of FANG stock Netflix are off about 2.25% Friday despite the bid in the broader averages. As with Amazon, the streaming video on demand giant has pleased consumers and investors alike during the coronavirus. I personally can’t get enough of the new Netflix Original mini-series “Tiger King” and have season three of “Ozark“ in the queue.
Technically, NFLX stock’s leadership in recent weeks wasn’t perfect. March’s bear market briefly took a bite out of a classically-formed high-level corrective double-bottom basing pattern. But this is no time to cry over spilled milk.
In the context of March’s extreme market sell-off and considering this FANG stock’s ability to break out of the base to new highs this week, Netflix shares are a buy today. And given today’s pullback, investors are being offered the opportunity to purchase NFLX near the pattern buy point and prior high of $423.21.
Alphabet (GOOGL)
Source: Charts by TradingView
The last name in our FANG stocks acronym is Alphabet, the parent company of Google. Similar to peer Facebook, shares of Alphabet are bid sympathetically in-line with the broader averages in Friday’s session. Also, the diversified tech giant is likely to feel some ad dollar pain in the short-term in its search and YouTube business.
Technically and like FB shares, GOOGL stock has outperformed the broader market on the price chart. A monthly chart double bottom was a bit weaker than Facebook’s own higher low formation. Overall though, given a similar neutral stochastics set-up and April’s inside candlestick pattern, buying with a bit of comparable firming on the Alphabet stock price chart make sense for this FANG stock in the not-too-distant future.
Investment accounts under Christopher Tyler’s management doesn’t own positions in any 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.
