Insights

What are FANG Stocks? Nasdaq Growth Names on the Move

Remember FANG stocks? Investors are flocking back to major technology stocks like Facebook (FB) today.

The NYSE FANG+ index ($NYFANG)
is up 2.7 percent in afternoon trading, its biggest gain since late January. That’s driving a big rally in the Nasdaq-100. Meanwhile the Nasdaq-100’s volatility index ($VXN.X) is crashing as fear leaves the market.

At least two big news events are explain the moves. First, Nvidia (NVDA) restored confidence in semiconductors by acquiring smaller chip designer Mellanox (MLNX). That suggested there’s still potential for growth in the space– even if
Apple’s (AAPL) iPhone has peaked.

Speaking of AAPL, Bank of America Merrill Lynch upgraded the smart-phone giant. The analyst essentially said demand was stabilizing and enough bad news was priced in. His target price for AAPL, currently trading at $178.50, went up from $180 to $210.

FANG Stocks in Focus

Let’s take another look at the $NYFANG index. The “FANG” grouping started a few years ago with FB, Amazon.com (AMZN), Neflix (NFLX) and Alphabet (GOOGL). It then spread to other major growth names like NVDA and AAPL.

NYSE followed by launching $NYFANG as an official index in November 2017. Chinese e-commerce giants Alibaba (BABA) and Baidu (BIDU) were added, along with Tesla (TSLA) and Twitter (TWTR).

According to the prospectus, NYFANG seeks to “represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies.”

Interestingly, some other stocks that potentially fit that bill are moving today.

First, Latin America’s Mercadolibre (MELI) and PagSecuro (PAGS) are up nearly 6 percent. Etsy (ETSY) rallied 5 percent and Carvana (CVNA) gained 7 percent. And, don’t forget about the broader
Chinese technology group.

$NYFANG spent all of February has been trapped in a range as it pushed against its falling 100-day moving average. If current levels hold, it will be the second-highest close since early November. Are investors starting to fall back in love with this iconic group of stocks?

What are FANG Stocks

NYSE FANG index. Notice how the 50-day MA is starting to turn higher.


This article was written by David Russell, TradeStation Securities, Inc., part of the Monex Group Inc, published on 11/03/2019.

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