Human nature is a funny thing.
A few years ago, when the stocks formerly known as FANG were leading the markets higher, it seemed like everybody wanted a piece of the action.
The FANG stocks were expensive, but they were exciting. They seemed to rise almost every day.
It has been an extremely rough year for FANG, which I’ll refer to as MANA – Meta Platforms (META) , (formerly Facebook), Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) (formerly Google).
Technically, stocks are in a bear market, but MANA stocks look as if they’ve been through a crash.
Now that interest has waned, is it time to take a fresh look at MANA? Now that these names are beaten down, is it time to step in?
And what is the right price to buy these stocks?
Meta Platforms
Meta Platforms imploded earlier this week after announcing a loss of $9.4 billion on Reality Labs, the company’s metaverse unit. Worse, Reality Labs is projected to have significantly greater losses in 2023.
Shares of META are down nearly 71% year to date. Where will Meta Platforms finally find its footing?
I’m looking at a monthly reversal candle from August 2015 as the stock’s best opportunity to regroup. The low price for that month was exactly $72, so it’s no coincidence I’ll be buying at that level should META get there.
Amazon
Amazon’s market cap fell below $1 trillion on Thursday afternoon after the company missed revenue estimates. Shares of the world’s largest online retailer dropped 15% after the market close after losing 4% during the regular session.
What’s the right price for Amazon? In the early days of the pandemic, the stock exploded higher after forming a bullish hammer pattern (shaded yellow). The low of that candle is $81.30, which looks like a great price to buy Amazon.
Netflix
Streaming video giant Netflix may have already bottomed. After plunging more than 76% from its October 2021 high, the stock has found its footing and is now trending higher.
What’s the right price for Netflix? A market selloff could take the stock back to this month’s low of $212 (arrow). If Netflix reaches that price due to overall market action (as opposed to a company-specific issue), I’d consider buying it.
Alphabet
Shares of Alphabet have lost 11% since the company announced earnings earlier this week. For the year, the stock is down 36.3%.
Alphabet’s monthly candle is forming a bearish pattern (shaded yellow). Unless this stock mounts a major reversal by Monday’s close, a monthly shooting star pattern will form, signifying a further move lower is on the way.
Where should investors look to buy Alphabet? A former area of resistance near $82 (black dotted line) should now act as support.
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