• 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

Can Apple Save the FANG Stocks? Maybe Not

The potential for Apple to be an additional downside catalyst is high in a market inclined to sell good news.
By JAMES "REV SHARK" DEPORRE
Jul 31, 2018 | 07:26 AM EDT
Stocks quotes in this article: AAPL, AMZN, CAT

In the past the Apple Inc. (AAPL) earnings report often has been the most important of the quarter. The stock has lost some of its dynamism due to a general slowing in smartphone demand, but its report tonight takes on extra significance as the FANG names have crumbled.

The question is whether a strong report from Apple will help to provide support for other high-growth, big-cap technology names or will be another invitation to sell the news, like what happened with Amazon.com Inc. (AMZN) following a very good report. (Apple is a holding of Jim Cramer's Action Alerts PLUS portfolio and Amazon is a holding of both the Action Alerts PLUS and Trifecta Stocks portfolios.)

Back in the Steve Jobs days, Apple was notorious for low-balling guidance. The question wasn't whether it would beat estimates, but to what degree. That is no longer the case, but the company still has been able to produce a positive reaction as expectations remain muted.

Unfortunately, the current environment is reflecting an inclination to sell into strength and good news. We saw it with Amazon and, yesterday Caterpillar Inc. (CAT) was another example of how good news isn't enough to create sustained buying interest. It is likely that there will be sellers lined up to hit strength in Apple, but the report may help to bring the FANG names to a support level.

The market has been acting poorly for a couple weeks now, but the business media finally seemed to embrace that fact just yesterday as the FANG names fell. They simply are catching up with other areas of the market that already have been acting poorly. The big question now is whether downside momentum starts to build.

Many times in recent years the bears have been unable to close the deal when they were on the verge of a technical breakdown in the indices. There often is a rotational correction instead, and it is covered up by the indices. That causes many market participants to overlook the fact that it really hasn't been a one-way bull market since 2008-2009.

At the moment the indices are under some strong pressure but have not yet broken down into a full downtrend. On the other hand, many individual stocks already have undergone some severe corrective action and the FANG names joined them in the last couple days.

The important thing here isn't to guess when the market may find support and turn back up, but to protect capital while this action plays out. It is possible that we see a bounce and a major turn back up, but that is not the smart bet.

It is very likely that Apple will not "save" the FANG names tonight. If anything, the potential for it to be an additional downside catalyst is high as the market is inclined to sell good news.

This is not a market for aggressive buying. Risk of further downside is high and capital protection should be paramount.

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 had no positions in the stocks mentioned.

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

More from Technology

Novocure Enters a New 'Phase'

Bruce Kamich
Apr 14, 2021 12:27 PM EDT

Here is where aggressive traders could go long the cancer therapy name.

What's the Logical Approach on Logitech?

Bruce Kamich
Apr 14, 2021 8:42 AM EDT

Let's check out LOGI's charts and indicators and find out.

Jim Cramer: The Tale of My Apple Watch

Jim Cramer
Apr 14, 2021 6:19 AM EDT

I keep saying own Apple, don't trade it. If not? I can't help you.

AT&T's Charts Are Just Treading Water

Bruce Kamich
Apr 13, 2021 12:25 PM EDT

There's not a compelling bullish case at this point.

Here's Why We're Bullish on Cisco Systems

Bruce Kamich
Apr 13, 2021 11:45 AM EDT

Let's review the charts and indicators.

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

  • 02:42 PM EDT PAUL PRICE

    Wednesday on Real Money Pro

    Make this stock a 'part' of your portfolio.
  • 04:44 PM EDT PAUL PRICE

    Pretty Incredible + Hard to Believe

  • 11:18 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    The 5 Pillars of Exceptional Trading
  • 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