Bulletin
Investor Alert

The Tell Archives | Email alerts

Jan. 23, 2021, 12:44 p.m. EST

Rally time? The ‘biggest red flag’ in this bull market just vanished, trader says

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    S&P 500 Index (SPX)
  • X
    Netflix Inc. (NFLX)
  • X
    Facebook Inc. Cl A (FB)

or Cancel Already have a watchlist? Log In

Shawn Langlois

Those “highflying FAANG stocks” haven’t exactly lived up to their billing in recent months, but the longtime leaders of the relentless bull market did help the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.95% break into record territory on Inauguration Day.

Netflix /zigman2/quotes/202353025/composite NFLX +1.00% , in particular, provided a strong tailwind on Wednesday, having logged a double-digit rally to notch all-time highs . That kind of action, according to Jani Ziedins of the Cracked Market blog, is a strong indications that this latest push has legs.

“The biggest red flag of the S&P 500’s recent strength was the lack of participation by this country’s best companies,” he said in a blog post this week . “But as the saying goes, better late than never. The FAANG stocks are getting their mojo back.”

Even as the broad market held up strong in the face of growing political discord in the aftermath of the election, he pointed out that Facebook /zigman2/quotes/205064656/composite FB +2.58% , Apple /zigman2/quotes/202934861/composite AAPL +1.07% , Amazon /zigman2/quotes/210331248/composite AMZN +0.77% , Netflix and Google /zigman2/quotes/205453964/composite GOOG +2.90% gave up their leadership position to value and smaller tech names.

“These best-of-the-best companies have been struggling to pull themselves off of recent lows and were stuck in consolidation patterns,” he wrote. “Some of this underperformance makes sense since Democrats have been vocally targeting these titans of tech for their anticompetitive business practices.” He added that removing Trump from Twitter /zigman2/quotes/203180645/composite TWTR +0.30% and Amazon taking down Parler raised concerns about Big Tech and what’s to come.

“But as the popular saying goes, it is darkest right before the dawn,” Ziedins said, pointing to Netflix’s big post-earnings move, as well as Alphabet’s fresh record highs.

The tech sector managed to hold on to recent gains during Thursday’s trading session, with the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.55% in green territory. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.85% and S&P 500, however, were moving slightly lower, at last check.

/zigman2/quotes/210599714/realtime
US : S&P US
3,841.94
+73.47 +1.95%
Volume: 3.33B
March 5, 2021 5:44p
loading...
/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 516.39
+5.10 +1.00%
Volume: 5.07M
March 5, 2021 4:00p
P/E Ratio
84.93
Dividend Yield
N/A
Market Cap
$226.45 billion
Rev. per Employee
$2.66M
loading...
/zigman2/quotes/205064656/composite
US : U.S.: Nasdaq
$ 264.28
+6.64 +2.58%
Volume: 26.82M
March 5, 2021 4:00p
P/E Ratio
26.16
Dividend Yield
N/A
Market Cap
$733.67 billion
Rev. per Employee
$1.47M
loading...
/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 121.42
+1.29 +1.07%
Volume: 153.77M
March 5, 2021 4:00p
P/E Ratio
32.82
Dividend Yield
0.68%
Market Cap
$2016.75 billion
Rev. per Employee
$1.86M
loading...
/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,000.46
+22.89 +0.77%
Volume: 5.39M
March 5, 2021 4:00p
P/E Ratio
71.86
Dividend Yield
N/A
Market Cap
$1499.40 billion
Rev. per Employee
$297,430
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 2,108.54
+59.45 +2.90%
Volume: 2.20M
March 5, 2021 4:00p
P/E Ratio
36.98
Dividend Yield
N/A
Market Cap
$1376.11 billion
Rev. per Employee
$1.35M
loading...
/zigman2/quotes/203180645/composite
US : U.S.: NYSE
$ 66.95
+0.20 +0.30%
Volume: 22.35M
March 5, 2021 4:02p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$53.28 billion
Rev. per Employee
$675,700
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
12,920.15
+196.68 +1.55%
Volume: 6.71M
March 5, 2021 5:16p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
31,496.30
+572.16 +1.85%
Volume: 505.35M
March 5, 2021 5:44p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Investing

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.