Heard Of FANG stocks? Why YOU should know…

Trade FANG Stocks’ Momentum Surge — Facebook, Amazon, Netflix, Alphabet

The four FANG stocks now have positive weekly charts after getting hit after the election. Here’s how to trade them.

 

Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) are a group of momentum stocks nicknamed FANG by TheStreet’s Jim Cramer. Each of these stocks were hit hard by profit-taking between Oct. 6 and Oct. 28, and continued lower following the presidential election on Nov. 8. All four set tradable lows on Nov. 14.

Facebook ($124.90 on Jan.9) set its all-time intraday high of $133.50 on Oct. 25 and experienced a price gap lower on Nov. 3, with a low of $126.28 on Nov. 2. The stock is up 8.6% so far in 2017 and is up 10% since trading as low as $113.55 on Nov. 14. The stock is 6.4% below its all-time high, and is below the price gap to the Nov. 2 low of $126.28.

Amazon ($796.92 on Jan.9) set its all-time intraday high of $847.21 on Oct. 6 and experienced a price gap lower on Oct. 28, with a low of $815.43 on Oct. 27. The stock is up 6.3% so far in 2017 and is up 12.2% since trading as low as $710.10 on Nov. 14. The stock is 5.9% below its all-time high, and is below the price gap to the Oct. 27 low of $815.43.

Netflix ($130.95 on Jan.9) traded as high as $129.29 on Oct. 24, then traded as low as 110.68 on Nov, 14. The stock is up 5.8% so far in 2017 and is the biggest winner since Nov. 14, with the stock up 18.3% since trading as low as $110.68 on Nov. 14. The stock is 2.2% below its all-time high of $133.88, set on Jan. 6.

Alphabet ($827.18 on Jan.9) set its all-time intraday high of $839 on Oct. 28, then traded as low as $743.59 on Nov. 14. The stock is up 4.4% so far in 2017 and is up 11.2% from its Nov. 14 low. The stock is only 1.4% away from its all-time high.

Facebook and Alphabet are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells FB or GOOGL? Learn more now.

Let’s look at the weekly charts and the key levels for these stocks and how to trade them now.

The weekly chart shows a red line through the price bars, marking the key weekly moving average (a five-week modified moving average). The green line is the 200-week simple moving average, the “reversion to the mean.”

The study in red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00, where readings above 80.00 indicate overbought and readings below 20.00 indicate oversold.

A negative weekly chart shows the stock below its key weekly moving average, with weekly momentum declining below 80.00 in a trend toward 20.00. A positive weekly chart shows the stock above its key weekly moving average, with weekly momentum rising above 20.00 in a trend toward 80.00.

Here’s the weekly chart for Facebook.

Courtesy of MetaStock Xenith

The weekly chart for Facebook is positive, with the stock above its key weekly moving average of $120.98. Facebook is well above its 200-week simple moving average of $80.66. Weekly momentum is projected to rise to 29.32 this week, up from 29.32 on Jan. 6.

Investors looking to buy Facebook should consider buying weakness to $119.09 and $109.79, which are key levels on technical charts until the end of this week and the end of 2017, respectively. I show a monthly pivot of $124.85, which was crossed on Monday, as an aggressive level at which to reduce holdings.

Investors looking to reduce holdings should consider selling strength to $132.93 and $142.19, which are key level on technical charts until the end of March and the end of June, respectively.

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