The FANG group of stocks -- Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) -- formed positive hammer-like candles on their weekly charts, after several previous periods of underperformance. On the daily time frame, however, they are at best in only the initial stage of recovery, and at worst may be preparing for another leg lower.
The underperformance of the FANG stocks in the post-election period and the potential for them to continue lower and be a drag on the broader market, as I've said.
The group did go on to break key levels of support and move lower, but the broader market has been resilient, and it moved to new highs. There was a small bounce in the FANG stocks last week, which created the hammer candles on the weekly chart, but the price action in Friday's closing session was not particularly constructive.
Let's take a look at the individual FANG charts and the new technical levels as we head into a new week of trading.
Facebook shares broke the previously highlighted $120 support level and its 200-day moving average last week, moving down to the $114 level. The reinforced support area has proven to be a sticky zone, and the stock price has remained just under the long-term average.
On Friday, it touched back up over the average but pulled back, closing near its low of the session, and forming a bearish dark cloud cover candle in the process. This candle overlaps the upper end of a previously bullish candle and at important intersections of resistance can signal a top.
There has been an increase in volume during this recent downturn, and it looks like the trend is still lower. Support is now the $114 level and a break below it could take the stock to the $108 level.