• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Technology

Face It, Facebook's Frothiness Has Me Wondering About Momentum's Limits

The powerful moves in the social media giant and Nasdaq 100 come as the broader market is quite lethargic, which is reason for caution.
By JAMES "REV SHARK" DEPORRE
Jul 27, 2017 | 10:43 AM EDT
Stocks quotes in this article: FB, AMZN, WB, TTD, PETQ

The term "blow-off top" is used far too often by hopeful bears, but it is hard not to contemplate that idea given the action today in Facebook Inc. (FB) . Obviously, the company had a very solid report, but the stock already has run up about $17 this month before another $10 move today.

That is very powerful momentum, but what is interesting is that the broader market is quite lethargic. Breadth is negative, small-caps are in the red and there isn't much positive spillover from Facebook other than Amazon.com Inc. (AMZN) and a few other intranet names. (Facebook is part of Jim Cramer's Action Alerts PLUS charitable trust and Amazon is part of the Trifecta Stocks portfolio.)

The indices were already overbought and the frenzy in Facebook is really stretching the Nasdaq and Nasdaq 100, which have seen just one down day in about three weeks. That strength is not being confirmed by other elements of the market and is reason for some caution.

My market view is always a function of my ability to find stocks to buy. There just isn't too much I want to add right now. I'm seeing good action in recent picks such as Weibo Corp. (WB) , The Trade Desk Inc. (TTD) and PetIQ Inc. (PETQ) , but biotechnology is soft and I'm not getting money to work the way I like.

I purposely avoid calling market tops, but if I'm not buying much then I'm by default more cautious. That is where I'm right now. With Facebook and the Nasdaq downright frothy, we have to wonder about the limits of momentum.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long WB, TTD and PETQ.

TAGS: Investing | U.S. Equity | Technology | Earnings | Markets | How-to | E-Commerce | Risk Management | Stocks

More from Technology

Nano Dimension's Cash Raising Could Lead to Some Intriguing Scenarios

Timothy Collins
Jan 19, 2021 12:15 PM EST

In four months, NNDM will have raised $1 billion in cash.

Cybersecurity Stocks that Lagged in 2020 Could Get Boost from SolarWinds Hack

Eric Jhonsa
Jan 16, 2021 8:00 AM EST

The hack stands to drive an uptick in corporate and government spending to protect both on-premise and cloud assets.

I Find Draganfly's Connection to American Airlines Intriguing

Timothy Collins
Jan 15, 2021 12:29 PM EST

Drones are set to become a bigger and bigger part of the commercial world and our day-to-day lives.

Twitter Shares Are Just Plain Overvalued

Jim Collins
Jan 15, 2021 11:45 AM EST

Here's where Jack Dorsey's ship will start to sink.

World's Third-Largest Smartphone Maker Added to U.S. Military Blacklist

Alex Frew McMillan
Jan 15, 2021 8:30 AM EST

Xiaomi shares plunged in Hong Kong trade Friday after the Department of Defense said the mobile-phone maker is part of China's 'military-civil fusion'.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:09 AM EST GARY BERMAN

    Is Copper About to Turn to Rust?

    Below is a very long-term copper chart.  As you...
  • 08:02 AM EST GARY BERMAN

    Tuesday Morning Fibocall for for 1/19/2021

    SPX (Long-Term View) The 1/8/21 high @ 3826.69 i...
  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login