FANG Stocks Update: A HUGE Divergence Continues to Widen

It's been a while since our last look at the FANG stocks... individually, and as a group. Not much has changed since the last time. Apple (AAPL) and Alphabet (GOOG, GOOGL) continue to outperform, and Facebook, or Meta (FB), and Netflix (NFLX) continue to underperform. Indeed, Netflix and Meta -- and Netflix in particular -- remain in severe deterioration mode. Both lost ground on Wednesday with the rest of the market, and both remain within easy reach of new multi-month lows hit earlier this month. Amazon (AMZN) continues to mirror the major indices' performance. It's all illustrated on the graphic below, which plots each FANG stocks' performance since making a major bottom in March of 2020.

This is interesting, if only because this is the biggest performance diversion we've seen among the FANG names since... well, perhaps ever.

That's not necessarily a bad thing. It's not necessarily a good thing either, however. It demonstrates that traders have differing opinions of each of these companies' futures, which is healthy since it says the trading crowd is at least thinking things through. It's a bit problematic, however, since all of the FANG stocks are considered stalwarts, and should be helping lead the market higher rather than hold it back. And, a careful look at Facebook and Netflix implies the market is testing the waters of renewed downtrends.

In any case, there are only two individual daily charts we want to drill into here, as both are currently testing important technical resistance...yet finding technical support as well,

The first of these charts is Alphabet. It broke above its 200-day moving average line (green) at 2744 on Tuesday, but failed to clear its 100-day moving average line (gray) at 2799 on Wednesday. It appears stuck between that rock and a hard place for the time being. This isn't entirely unexpected. Both are important lines in the sand, and we should see some wrestling here. The good news is, whatever happens from here should be telling.

The other item of interest on the daily chart of Alphabet is, a clear support level has developed at 2505 (red, dashed). It may come into play again, if things go south.

The other daily chart of interest is Amazon's, largely because it's in a similar predicament as Alphabet. That is, while it appears to be holding above its 100-day moving average line (gray) at 3240, it also appears to be bumping into resistance at its 200-day line (green) at 3332. Shares tested that technical ceiling on Tuesday as well as Wednesday, but never cleared it.

It remains to be seen if this is an early omen of more indecision looming for the other FANG stocks, or all stocks in general. It does point to a little bit of indecision for two key names right now though.

The good news is, these pauses can actually be beneficial. Stocks can "wind up" while trapped in a narrow range of support and resistance, and then once it breaks out of it, the move can last a while. For this reason both Amazon and Alphabet are worth adding to your watchlist, if only to see if these patterns are the beginning of something trade-worthy.

If you'd like to get more out of the market by leveraging the big moves from the market's most-watched names, take a look at the FANG Options Trader Advisory Service. This options trading newsletter focuses solely on these stocks, using custom-built algorithms that capitalize on each of their unique movements. Go here to learn more.