Many on Wall Street wonder if the once-leading FANG stocks – Facebook (FB), Amazon (AMZN), Netflix (NFLX ) and Google Parents Alphabet (GOOGL) – have fallen out of favor. Given the overwhelming influence of these top tech stocks on the S & P 500, investors may be worried.
The FANG shares that were expanded to "FAANG" include Apple (AAPL), were hit hard this week. Negative headlines continued to wander around Facebook and Amazon, causing a decline in the tech sector.
Are the FANG shares dead?
Kevin Quigg, chief strategist at Exponential ETFs, has even gone so far as to say that the FANG / FAANG trade is dead – forever.
"I do not know that the individual companies are dead, but I think the collective behavior in which all companies themselves behave in a similar way is a thing of the past," Quagg told Investor's Business Daily via Skype.
"Collective gathering and the assumption that you can achieve returns in excess of 20 percent per annum is unsustainable in the long run."
How Investors Should Handle Their Portfolios
Quigg also pointed out that the tech-heavy impact in the S & P 500 gives cause for concern among investors.
"The FAANG names plus Microsoft (MSFT) are 28% of the S & P 500. Apple is the same … their outs The impact on the markets is beginning to spread, "said Quigg.
" The time to think of FAANG as a sole proprietorship or trade is over. I think you have to look at the individual dynamics that dominate these companies. "
The Facebook stock is well below its long-term 200-day line and over 22% below its all-time high of 195.32 The warning signs for Facebook appeared before the recent data scandal: the relative strength line, the tracked the performance of a stock against the S & P 500, was already several months ago.
Amazon shares were unlike other FANG titles, which make themselves more resilient compared to other FANG titles The Report that President Trump Votes Against Amazon Marks Sharp Price Drops Under the 50 Day Line on Wednesday (19659004) Netflix
Netflix shares hold best on its FANG competitors, with the stock rising higher on Thursday This is the first rebound of the 50 days after Netflix's January breakout, which means it's a secondary buying opportunity, but that's not the case All market environment guarantees to be careful to make new purchases.
Google Parent Alphabet
Google stock has pulled back its 200-day line on Friday, a good first step. But it is not clear yet if this can really support the stock. Alphabet is now over 150 bucks below its all-time high of 1,198 on January 29. While stocks seem to be consolidating, there is no buy point within reach.
shares above its 200-day mark, but faces a clear resistance on the 50-day line. The iPhone maker needs to reclaim and hold this level to prove that the stock has begun to repair the damage it saw in 2018.
YOU MAY BE INTERESTED:
These four tech stocks came through With flying colors in the rough week
How do these 5 growth stocks beat the market?
These 4 factors contribute to the volatility of the market in 2018