FANG Stocks Update: Shaken, But Not Broken

After months of clear leadership, the FANG stocks are starting to fail...some of them anyway. One of the laggards has found new life while another is on the verge of higher highs following higher lows. As a group though, these tech-oriented names are hitting a wall.

The performance comparison chart below puts things in perspective. Netflix (NFLX) and Facebook (FB) have been terrible this week, with the latter in a choppy downtrend since peaking in late August. Since last March's low, each had outperformed the Nasdaq Composite as well as the Nasdaq 100 indexes. That's changed dramatically in just the past few weeks. Apple (AAPL) is also still the leader it was coming out of the post-coronavirus selloff in February and March of last year, reaching a record high late last month. But, even this hot name has taken a tumble over the course of the past month.  

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Note that with the exception of Apple, every FANG stock is now trailing the Nasdaq composite index for the past 13 months. Most of them are on the verge of falling behind the Nasdaq 100 index for the same time frame.

That being said, there are a couple of stock charts of these names we really want to drill into.

Amazon (AMZN) is one of them. As you can see on the daily chart below, it's been getting squeezed into a narrowing trading range (framed by red dashed lines) since the middle of last year. That falling resistance and rising support is close to coming to a point within which the stock will no longer have space to move. Typically, this sort of setup squeezes a stock at of the range and into a more prolong to move. As it stands now, such a move looks like it would be a bullish one.  

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Underscoring this possibility is the fact that the stocks 20-day, 50-day, and 100-day moving average lines (blue, purple, gray) have all converged over the course of the past three months around the $3200 mark. In as much as stocks move it in and out of periods of high volatility and low volatility, this congestion around $3200 now looks primed to turn into a divergence.

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