The famed FAANG gang has lost its bite over the last trading year as investors and traders alike reposition themselves for the next resurgence in demand for growth stocks.
The original FAANG stocks, which include Facebook (now Meta), Apple, Amazon, Netflix and Alphabet (Google), need no introduction and make up most of the growth portfolios globally. The Tech sector has been under immense pressure over the last 12 months, and there might be more in store if the US earnings season disappoints over the following weeks.
Looking at the FANG+ Index (NYFANG), which includes other actively traded growth stocks like Microsoft, Tesla, Nvidia, and Alibaba, we can see the Index trend lower since its all-time highs.
Let’s look a little closer at the original FAANG constituents:
Meta Platforms, Inc. (NASDAQ: META)
Facebook owner Meta Platforms might be in for another rough ride if the UK Competition and Markets Authority has its way. The regulator finally warned the social media platform company to sell the animated-images platform, Giphy. This is just one of many headwinds Meta has recently faced with regulators and recently appealed a €390 million fine for the alleged violation of the European Union’s data protection and privacy regulations.
The price action has rebounded somewhat from the $ 87.76-a-share support level and is heading towards the resistance at the $ 138.56-a-share. Investors would need to see the price move and stay above the resistance level to negate the recent sell-off from all-time highs in September 2022.
Apple Inc. (NASDAQ: AAPL)
The growth sector has been feeling the brunt of the recent market sell-off, but Apple, in comparison to the other FAANG constituents, held its ground, but for how long? The tech giant has recently moved below the $2 trillion market cap threshold, and there might be more in store over the coming weeks as economic data filters through during the US earning season.
Technically we could expect the share price to move lower to the $118.00 support level, which could possibly give investors better entry points. The price action could see a bounce from support as investors add to their portfolios at these attractive levels. But shares that become cheaper could get a lot cheaper, and apple is no exception. If the support does not hold, then we could see lower support levels in focus around $107.00 a share.
Amazon.com, Inc (NASDAQ: AMZN)
The mighty Amazon could also be in for a rough ride ahead of the earnings season as the retail giant is set to lay off over 18 000 employees to save on cost. The retail sale of consumer products company is no stranger to economic hardships and has shown its tenacity during times of uncertainty.
Technically, the price action has reached a major support level at $84.00, which investors will watch closely as the price has rebounded from here in the past. If this level does not attract any investors, then it is possible that the recent sell-off could continue, which brings the $65.57 a share into focus.
Netflix Inc (NASDAQ: NFLX)
The streaming service Netflix has been gaining ground since the second half of 2022 as subscriber numbers increase and measures to clamp down on password sharing intensify. The company’s financial metrics have also returned to satisfactory levels, but all eyes will be focused on the next earnings release scheduled for the 19th of January, 2023.
There is a possibility of a move higher from current levels back to the $332.23 resistance if the price action is supported by the 50-day simple moving average of the price (blue line). If the price moves beyond the resistance level, the next significant resistance might be $396.14. For the bear case, if the broader market continues its downward trajectory, we could see the price move significantly lower.
Alphabet Inc Class A (NASDAQ: GOOGL)
Alphabet has also been facing a downward slope, with the share price lower by 37% over the last year; the question remains if Google can hold on to its market share globally. Over the last twelve months, the search engine raked in over $280 billion in revenue and is currently the third largest cloud service provider behind Amazon.
Technically it does not look good for the price action on Alphabet’s class A share, as the price action has been trending lower in a channel over the last year. The price action is moving towards the major support level of around $86.20 and could see some interaction by investors. If this level does not keep the bears at bay, the price action could move lower to $75.69 a share.
Summary
Growth shares are set for a definitive year for investors, as monetary policies set the tone for 2023, which could have more downside surprises for the growth sector in-store.
Sources: Intercontinental Exchange, Inc. (ICE), Meta Platforms, Apple Inc, Amazon.com, Inc, Netflix Inc, Alphabet Inc, Bloomberg, SeekingAlpha, TradingView.
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