• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock Key Levels for the FAANG Stocks
Stock

Key Levels for the FAANG Stocks

by April 8, 2023
by April 8, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

A number of my conversations this week on The Final Bar dealt with the challenges presented by narrow leadership. Joe Rabil pointed out the weakness in small caps, and Jeff Huge focused on the difference between the YTD returns of FAANG stocks versus pretty much everything else.

Why is narrow leadership such a problem? 

In the end, it’s all about broad participation, and whether the “infantry” (mid-cap and small-cap stocks) are following the “generals” (mega-cap and large-cap names). In healthy bull market phases, the average stock tends to do pretty well because “a rising tide lifts all boats.”

We shared a video earlier this week outlining the issues with narrow market leadership and what we’d need to see to turn more bullish on prospects for risk assets. Today, we’ll look at the five FAANG stocks one-by-one, focusing on key levels to watch that would indicate a potential new leg lower for our major benchmarks.

The Strong: META and AAPL

When I look at the five stocks in question, I’m immediately drawn to the two with the most encouraging trends in 2023.

To start, META has more than doubled since its low in November and made a new high for the year again this week.

If you draw a trendline starting at the November low, you’ll see that the pace of this uptrend has been remarkably consistent. The stock remains above two upward-sloping moving averages, and the recent breakout above $200 was just the latest in a series of confirmational up moves.

Ready to upgrade your investment process, improve your understanding of market dynamics, and make real progress on your journey of behavioral investing? Check out our Market Misbehavior premium membership!

A chart like this provides a fairly straightforward game plan, in my opinion, because as long as the price remains above this trendline, the uptrend is intact. If and when the purple trendline is broken, that will tell us of a potential “change of character” on the chart.

There’s a similar look to the chart of Apple (AAPL), although in this case the ultimate low was right at the beginning of 2023.

Here, we can see the trendline connecting the recent lows show a consistent uptrend as well, which can provide a very clear sell signal when that trendline is breached.

The problem with the AAPL chart is that it is approaching a significant resistance level in the $175-180 range. This level was where the stock first topped out in December 2021, and subsequent highs in Jan 2022, Feb 2022, Mar 2022. and Aug 2022 were around that same level.

If Apple is able trade not just to resistance but through it, pushing above the key $180 level, then that would be an incredibly strong argument for a continued bullish phase for our major equity benchmarks. However, the fact that this level has been tested numerous times already tells me to be wary as AAPL attempts to breakout yet again.

The Questionable: GOOGL & NFLX

In terms of actionable signals this week, Alphabet (GOOGL) finished the week above its February high around $108. If we see further follow-through after the holiday weekend, that could indicate another bullish sign for our equity indexes.

I’ll label this chart as “questionable,” because I would argue there is still much to prove here. Note how the February high was an unsuccessful attempt to break above the 200-day moving average. In March, the price finally broke above the 200-day, then retested this moving average from above.

So, just below current levels, we have a confluence of support, based on the 200-day moving average, the most recent swing low in late March, and a “big round number” of $100 which often serves as support. If and when GOOGL breaks below $100, that would raise a serious red flag given the lack of upside follow-through.

Netflix (NFLX) has a fairly constructive chart, given that it’s currently above its 200-day moving average, but is at the risk confirming a lower high, as it pulled back in the latter half of this week.

NFLX has one of the strongest runs of performance from May 2022 to Feb 2023, but, unfortunately, the stock sort of stalled out in February and March. The high this week was around $350, well below the February peak at $375.

One of two things will happen on this chart once the current consolidation phase is complete. A break to a new swing high around $375 would confirm a new bullish phase for this stock. On the other hand, if NFLX breaks below its March low around $280, followed by a break below the 200-day moving average, that would provide a key bearish signal in a crucial mega cap stock.

The Ugly: AMZN

Now we come to what I would consider to be the clearly weakest chart of the five. Why can I say that with confidence? Because it’s the only one of the five currently below its 200-day moving average.

Look at how many times AMZN has attempted to break back above its 200-day after first breaking down in January 2022. The February rally was just the latest attempt to push above this classic long-term trend barometer.

The bullish case for Amazon would be based on the higher low in March around $90. But what would actually turn this chart from bearish to bullish? I would argue that, until AMZN can power above the February high, which would take the stock well above its own 200-day moving average, the primary trend remains down.

The most important charts I analyze every day are the weekly and daily charts of the S&P 500 index. After that, I look at literally hundreds of individual stock charts every single day. By focusing on the key levels of interest on these five charts, you’ll be monitoring the most important stocks with the greatest ability to have meaningful impact on the broader equity indexes.

Want to go through these charts through an immersive video experience? Just head over to my YouTube channel!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!

David Keller, CMT

Chief Market Strategist

StockCharts.com

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

You Might Also Like
  • The Worst Month of the Year is Behind Us — Here’s What We Need to See for Better Times Ahead
  • Why Cisco’s Stock Reversal Could Be a Game-Changer
  • Why We’re Going Higher And Two Necessary Steps To Become A Better Trader
  • Halloween Scare: The Stock Market Ends October on a Wicked Tone
Share
0
FacebookTwitterPinterestWhatsapp

previous post
The Stock Market in 2023 is Like Picasso’s Cubist Period
next post
Wisconsin probation program struggles to monitor, rehabilitate offenders, audit finds

You may also like

Sector Spotlight: Monthly Charts Suggest Downside Risk is Limited

November 2, 2023

Market Flashes Green Light Amid Broad-Based Rally

April 1, 2023

One Potentially Big Problem Is Lurking For The Bulls This...

May 19, 2024

Why the Market is Ready to Rally!

March 15, 2025

SMH Bulls are Skating on Thin Ice

April 23, 2023

Week Ahead: NIFTY Steps Into Next Week With These Two...

January 11, 2025

These Stocks are Just Beginning Their Move Higher!

September 14, 2024

Not Much Good Takes Place When This Happens

August 6, 2024

Three Thoughts on Risk Management for October 2024

October 9, 2024

Fibonacci Says Upside to SPX 4300

May 20, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Macro Market Outlook and Best Options...

    November 19, 2024

    The Ord Oracle May 2, 2023

    May 3, 2023

    Does “NoGo” for the S&P =...

    August 17, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here