The uncertainty surrounding FAANG stocks continues to be at high levels and people who are trading stocks are beginning to question whether tech stocks can continue to outperform the market as they did last year. Because of that, today we’ll make a brief market outlook in which we will analyze each stock’s performance since the beginning of December 2018 and what should be expected in the near future.
Since mid-December Facebook had a sideways performance, trading at $145 per share, weakening towards $124, and then resuming the upside and currently being located above $140. Trading at a multiple of 23.35, FB had been trading lower since July 2018. The price action does not suggest there was a “change of hands” happening in the market, which means that sellers could view the current run-up as a new opportunity to sell.
The AAPL stock continued to weaken since December, as the bad news about the iPhone maker continued to flood the market. Those who are trading stocks watched how the stock continued to trend lower, from $170 towards $142, where it started a corrective move. Trading at a multiple of 12.47 the stock is in oversold territory and it will all depend on the guidance issued by the company on January 29th. The bottom line is that the iPhone continues to be the main source of income and the company will need to come up with innovative ideas to make the phones more competitive.
Similar to FB, Amazon had a sideways performance since mid-December, trading little above the $1,600 area at the time of writing. The stock price is down 19.6% from the all-time highs and if we look at the bigger picture, we can see there was a greater interest to buy the stock at the lows, meaning investors are still confident in the underlying business. However, any sign of weakness in earnings or lower guidance could revive strong selling pressure, since the stock is trading at a 360-multiple level.
Surprisingly, the Netflix stock is the only one of the five which managed to bank some gains since mid-December. The stock traded at $276 on December 13th and it is located a little above $337 at the time of writing. The main engine behind the bullish move had been the increased expectations for a higher number of subscribers, but again, the earnings release and the guidance which will be released on January 17th will set the tone for the near future.
The GOOGL stock had a modest performance since mid-December but managed to trade above the $1,000 key psychological level. The stock is trading at a 35.54-multiple level and it was expected to continue to post strong returns on February 4th which it did, when the company released its earnings for the fourth quarter of 2018. Uncertain economic prospects could result in lower guidance, which in turn will put further pressure on the stock if the company will be more pessimistic about the future returns.