I receive a lot of questions from family, friends, and others on the current market actions of Google™ (e.g. Alphabet) as well as Facebook™ since they are now what everyone considers as two of the moniker de jure FANG stocks. (i.e., the momentum players.) Their push ever higher into the stratosphere as the market sells off closing in on 2% is being touted by many as “clear proof these names are indestructible.” Well, that maybe, and only time will tell. However, since they asked I felt I might as well show others what I replied. To wit:
Below are 2 charts the top is Facebook, the lower is Alphabet/Google. What I’m look at is; what may be witnessing in technical charting terms is a phenom known as a “blow off top.” If that is what is playing out the warning signs of such a phenom will be manifest if the price action falls back below the breakout line, and then crosses back through the space where I placed an “oval.” If it does indeed break back below that demarcated area with conviction and remains below it – all bets are off the table in my opinion.
Doesn’t mean it will happen, but for those who want to know what I’m looking at and how I’m viewing it – there you go.
© 2016 Mark St.Cyr