FANG Stocks

This update will take a look at the 4 stocks collectively referred to as “FANG”. FANG stocks include the following companies:

• • Facebook (FB)
  • Amazon (AMZN)
  • Netflix (NFLX)
  • Google (GOOGL)

Google has switched its name to Alphabet and now the whole acronym is just messed up. Time to make a new acronym.

Looking at a group of stocks can provides greater insight rather than analyzing individual stocks. The goal is to try to identify common chart patterns that may exist amongst the different companies charts. Let’s see if any of the FANG stocks have any similar chart action.

Facebook (FB)

Facebook has gone nowhere since its previous earnings report. It has been consolidating in a sideways pattern since its most recent earnings and developed a Bearish Tower Top candlestick pattern during the sideways consolidation.

FB’s Bearish Tower candlestick pattern developed after reaching its Golden Ratio for its multi-year uptrend. The Bearish Tower candlestick pattern could be indicating a longer than normal consolidation period.

So is upwards the next movement for FB’s share price? It appears so, but it also could still have some additional time in its sideways consolidation. If FB’s share price continues[s2If !current_user_can(access_s2member_level1)]….

If you want to continue reading this article for Facebook (FB) and the other FANG Stocks (Amazon, Netflix & Alphabet), you must first login. 

I compare the charts for each of the companies to determine if any similar chart patterns are developing. Finding multiple stocks with the same patterns can increase the likelihood of a correct market call.

I also review price objectives for each companies share price.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available. Your portfolio balance will thank you.[/s2If][s2If current_user_can(access_s2member_level1)] to rise and makes a new 52 week high while the MACD Histogram continues to show increasing selling momentum, then a bearish divergence is developing. Bearish divergences are indications to start looking for other bearish signs as the uptrend may be slowing down or coming to another consolidation period.

You want to see FB’s share price break above the resistance area from the Bearish Tower candlestick pattern on heavier than normal buying volume to confirm the breakout from the consolidation. Anything less than above average buying volume and the bearish divergence would be confirmed.

Amazon (AMZN)

My previous update for Amazon (AMZN) was in this article where I discussed a probable Head & Shoulders chart pattern for its share price:

“9/25/2017 – Amazon’s Head & Shoulders Chart Pattern”

With AMZN’s share price rebounding from the neckline of the Head & Shoulders chart pattern, its time to look at the alternative price action discussed in the article. When a stock does not breakout or breakdown as anticipated, look at the alternatives. In the above article, I mentioned some alternative price action.

There is also a chance does remain for AMZN to reverse course soon and make one final push towards the $1139 area. That remote chance is not one I think you should trade or “wait to see” if it develops.

Well, that “chance” could be developing. AMZN’s share price could push up toad even temporarily above the resistance area created by the Shooting Star candlestick pattern I discussed in the September update linked above.

How could that happen with a Shooting Star candlestick pattern, which is typically a very bearish candlestick pattern? Well, I’ve been reviewing its Elliott Wave breakdown from my previous update and came up with a more bullish Elliott Wave pattern.

This is a 5 year weekly candlestick chart for AMZN reflecting my new Elliott Wave breakdown.

The above Elliott Wave breakdown appears more consistent with the wave breakdowns that I am seeing on the other charts. The MACD Histogram rolled over and seems to be confirming the resumption of AMZN’s uptrend.

If things play out as illustrated, it may be time to trim shares during any “Santa Rally” this year….

Netflix (NFLX)

Netflix (NFLX) has been my least analyzed company of the FANG stocks. I only have one previous article to reference for NFLX.

“4/1/2017 – Amazon (AMZN) & Netflix (NFLX) Stock Chart Review”

At the time of that article, NFLX’s share price was around the $148 price level and I had warned about a probable upcoming consolidation/correction. It did not get much lower, hitting a low of $138.66 not long after the article.

In the article, I reviewed upside price targets, with the $180 price target first, then a $215 target with the possibly of reaching an extended $295 target.

This is a 10 year monthly candlestick chart for NFLX. It shows the $180 price target was reached and the $215 price objective is in play.

I noted a $180 aggressive entry on the above chart. That is for those still looking to go long. The $180 aggressive entry area would also be the probable pullback target in NFLX’s next consolidation. That means if you miss selling shares before the pullback, the pullback should only go as low as you original purchase price. The next consolidation for NFLX’s share price would be anticipated after reaching the $208 – $225 price range.

The first level of support during that consolidation will be the $190 aggressive entry area. That is where NFLX’s share price broke out of a Double Top chart pattern. The Double Tops were formed in July and September 2017. Based on this, why not just go long now? Consider starting with a small scale-in position and trade that position until NFLX’s share price reaches the $208 – $225 range. During the pullback from that range is when you would then start to add shares and build a core position.

Establishing a core position is usually best done during a lengthier consolidation period, allowing you to have the least risky cost basis going forward.

Alphabet (GOOGL)

Last but not least is Alphabet (GOOGL). I do like their name change from Google to Alphabet, but it sure did screw up the acronym.

Similar to other FANG stocks, GOOGL’s share price appears ready for new all-time highs in the upcoming weeks. My previous article for Alphabet was right after its previous earnings report:

“7/25/2017 – Alphabet (GOOGL) Post-Earnings Analysis”

In the article, I reviewed support areas. I stated that

Depending upon your trading and investing strategy, you may want to use one or both of those support areas as scale-in opportunity areas. The $960 area is obviously a more aggressive entry and subject to a temporary decline and further pullback. The $893 – $923 price level is more conservative but requires patience if it will even reach that area.

Alphabet’s (GOOGL) share price ended up pulling back to $918 before starting its rebound. During this attempted rebound, look for GOOGL’s share price to face the resistance area created by the Dark Cloud Cover candlestick pattern. It should be able to break above this resistance area based on the buying momentum indicated by the MACD Histogram, even if the buying momentum is slowing down.

Based on GOOGL’s current Bullish Impulse wave pattern, the $1,075 area appears to be its probable near-term price objective for the current uptrend. That area is identified by the gray shaded box on the above chart. Use any pullback back towards $1,000 or up to 10% from that area to repurchase any sold shares.

Be quick with any trades though. The $1175 area looks to be the real price objective before another lengthier consolidation. It is probable that around the $1,175 area that some core holdings could start to be trimmed. Another update should be performed as GOOGL’s share price is approaching that price area.

FANG Stocks Summary

FANG stocks still appear to have their “bite”. The Bullish Impulse wave patterns I’ve illustrated appear to still be in multi-year uptrends. These uptrends have the potential to keep pushing upwards, possibly even through the end of the current POTUS term. Obviously, there will be consolidation periods in between, but those should still be viewed as opportunities to repurchase any sold shares or even to jump in on a new company.

With more upside potential noted for each of the FANG stocks, it is important to always keep an amount of shares that you consider your “core position”. During an uptrend, don’t be afraid to trade around a core position. Just always keep your core shares in case a sudden price increase happens. FANG stocks still qualify for buying the dips.

In general, when a stock approaches a calculated price target, it becomes important to review your analysis and see if any revisions are required based on subsequent price action. Send me a request when any of your stocks start approaching a calculated price target. I will gladly re-review the charts at that time and either confirm or tweak the analysis.

Good luck trading!

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