The so-called FANG stocks got a shot in the arm today with the price of Netflix Inc. (NFLX) surging higher. A quick review of these four securities - Facebook (FB) , Amazon.com Inc. (AMZN) , Netflix and Google, a.k.a. Alphabet Inc. (GOOGL) should help in navigating the short-run.
(Facebook, Amazon and Alphabet are holdings of Action Alerts PLUS, which Jim Cramer co-manages as a charitable trust.)
In this daily bar chart of Facebook, below, we can see that prices made a low around $150 in late March and a retest in early April. The volume of trading was heavy into late March with prices below the 200-day moving average line and the declining 50-day line. Prices have recovered less than half of the decline from the early February zenith.
FB is still below the flattening 200-day line and the 50-day average is crossing below the 200-day line for a "dead cross." The volume of trading is not as heavy on this rise as it was on the decline telling us that buyers are not as aggressive as the sellers were last month.
Interesting that the On-Balance-Volume (OBV) line is up near a new high. The trend-following Moving Average Convergence Divergence (MACD) oscillator turned up last week to a cover shorts buy signal.
Bottom line: FB could move higher but overhead resistance increases above $175.
In this daily bar chart of Amazon, below, we can see that prices corrected more than $200 from the peak in March and they have rallied back to the underside of the flat 50-day moving average line. The volume of trading this month is less than the volume seen in late March as prices slumped.
The OBV line has only improved slightly from late March and the MACD oscillator is just now crossing to the upside for a cover shorts buy signal. Could AMZN be rallying to make a right shoulder of a top pattern? It is possible but we will need more evidence.
Bottom line: AMZN could firm into the $1500-$1550 area at which point it will have to prove itself as either a bull again or a possible right shoulder to a top formation.
Netflix gapped to the upside today, chart below, and could make a new high close for the move up. Prices are above the rising 50-day moving average line. The OBV line has risen this month telling us that buyers of NFLX are more aggressive and the MACD oscillator is turning up for an outright go long signal.
(See Jim Cramer's take: Netflix Numbers Show That Cord-Cutting Is Palpable.)
Bottom line: Full disclosure - my wife asked this morning about getting a trial subscription to NFLX - are we the last ones? Probably not. A close above $330 opens the way for a price target of $370.
Alphabet has a different price pattern than its "partners", chart below. Prices made a much deeper decline in February and the rally back in the back half of February and March failed to reach a new high. Prices tested the rising 200-day average line in February and broke below it in late March and early April on a retest. Recently GOOGL has rallied to test the declining 50-day moving average.
With the OBV line showing only a slight rise the past three weeks, I am not sure that GOOGL can rally much further. The MACD oscillator has crossed to a cover shorts buy signal.
Bottom line: If GOOGL weakens below $1,000 it will be a new low for the move down and a bearish sign. On the upside it is hard to find a level that should strengthen the picture.