Monitoring FAANG Stocks For Clues
In this article we analyze the daily charts of FAANG stocks to see what clues they offer as to where the Nasdaq 100 is headed during the next few weeks.
Before we dive into the charts, the FAANG acronym stands for five of the biggest tech giants in the market, Facebook ($FB), Amazon ($AMZN), Apple ($AAPL), Netflix ($NFLX), and Google ($GOOG), which can account for 30-40% of Nasdaq 100 weighting.
Let’s start with a chart of the Nasdaq 100 ETF ($QQQ), which is in chop mode the past few weeks trapped below the 50-day MA (blue line) but still well above the rising 200-day MA (orange line).
The daily chart of Facebook ($FB) doesn’t offer much help as it has performed pretty close to $QQQ, though it’s currently trending lower below a declining 20-day EME with lower highs and lows in place. A test of the 200-day MA is potentially in play here, but that wouldn’t be ugly at all, as it would give the stock some time to base out and eventually move higher.
The daily chart of Amazon ($AMZN) is at an critical area and may be able to offer some clues depending on how it holds up the next week or two. $AMZN is already at support of the 200-day MA (under-performing $QQQ) with a 50-day MA that is beginning to turn down. A break of the 200-day MA, that holds (follows line B), would be a clear negative sign for the next few weeks and for the Nasdaq 100. Whenever an obvious support level is broken, there is always the possibility of a false breakdown, which is quick recovery back above support within a few days that holds (follows line A).
Apple ($AAPL) is showing relative strength as it’s still above the rising 50-day MA, but the ugly stalling at resistance around $215 and bearish volume pattern doesn’t inspire much confidence. A break of the 50-day MA would suggest a test of the 200-day MA is coming.
Netflix ($NFLX) has already broken down well ahead of $QQQ and is in a strong downtrend below the declining 10 and 20-day averages. Look for support to come in around $269, which the price potentially dipping to $233 if the Nasdaq 100 breaks below current range lows.
Google ($GOOG) is in decent shape at support from the rising 50-day MA and rising 200-day MA just below. A break of the 200-day MA would be excessive, and cause for some concern, as well as suggest a test of the 1040 area.
So what can we take from all the analysis above?
The charts of $NFLX and $FB aren’t very useful as they are already in trend mode (though noting that $NFLX is already broken). $GOOG also won’t offer us much unless it breaks the 200-day MA. A break of the 50-day MA in $AAPL on volume, could offer some insight. But based on the daily charts above, $AMZN can make the biggest impact with a break of the 200-day MA, which would suggest institutional money is exiting a big time market leader. Such a breakdown would also suggest the Nasdaq 100 is headed lower for a few weeks as well.
Sign up now to receive your real-time trade alerts, hot stock picks, and educational market analysis included with your Wagner Daily subscription.
As always, drop us a comment below to share your thoughts on this article.