The tech leaders known as FANG; Facebook, Amazon, Netflix, and Alphabet (Google),  have all gotten beaten up recently. You could say that a cleansing has taken place and their valuations have been taken down a notch. In this most recent decline the broader S&P 500 has held up reasonably well, it has yet to break below the February low. It is possible that the FANG could move still lower, however, as you can see by the charts they have taken the brunt of the decline.

The two social media stocks have been hit the hardest, while Amazon is feeling some pain, via the administrations most recent comments. If you look at the S&P 500 in comparison you can see that it has held up reasonably well during this latest decline. It has yet to break below its 200-day moving average.

A rally in this oversold market is very possible, however, if the S&P 500 breaks the 200-day moving average we could see the whole market move lower. Facebook and Google have already broken their 200-day moving averages, while Netflix and Amazon are still way above their respective 200-day moving averages. If Amazon and Netflix continue their slide then the markets should follow their decline. I’m not of the belief that the market has entered a bear market, it’s just that the tech markets are getting some major profit taking.

 Hold on to your seats, this could get interesting. If this reaction can end without much further damage to the broader S&P 500 then we should get a more sideways movement going forward.

Pin It on Pinterest

Share This