FANG Stock Trading Strategy
Love him or hate him, Jim Cramer is in your face. Whether he’s screaming at you while you’re drinking your morning coffee watching CNBC or you’re reading his bold proclamations on the TheStreet, Cramer’s impact on how we view and discuss the stock market can’t be discounted. Cramer coined the FANG acronym back in 2014 and it is now rolling off the tongues of all the financial TV talking heads.
In case you’ve missed out, FANG is a snappy acronym for Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG), the quartet of turbocharged technology businesses that have a tremendous impact on the stock market.
While the fab four were major drivers behind the rally in early 2015, the FANG stock’s performance in 2016, along with the rest of the stock market, has been mixed. Valuations can be tricky for these kinds of companies. They are investing tons of money for future growth, so current earnings don’t really paint the whole picture.
Considering this new market paradigm, traders can no longer buy and hold the FANG stocks and hope for double-digit returns. That doesn’t mean there aren’t profitable opportunities from both the long and short sides of the market. Today’s traders who use market forecasting tools like VantagePoint can have confidence getting into trending trades in both directions.
Trading FANG with VantagePoint
In this NFLX chart, VantagePoint forecasted a downward move when the predicted moving average crossed below the traditional moving average all the way back in mid- December 2015. Many traders were still loving the FANG stocks, especially NFLX at that time, but VantagePoint traders could have potentially been short from $125 all the way down to $85.
Watch the video below to see a full analysis and breakdown of VantagePoint’s forecast for NFLX since early December.
For traders who are uncomfortable with shorting the FANG stocks or have account restrictions, all four stocks have very liquid options contracts with very high open interest and tight bid ask spreads.
If the current market volatility is taking a bite out of your FANG investing profits, you can bite back having VantagePoint’s market forecasting tools for two way trading opportunities. Schedule your free demo today.