FANG + BABA updates 01/03

Time to update the FANG stocks as these are all back with a vengeance…

FB: The whole advance off the September 2017 low (labeled as minor-4) is looking overlapping and mostly in 3 waves. This suggests an ending diagonal triangle. The (red) trend lines suggest this as well and price is adhering to those nicely. Minute-c of minor-5 to around $189 is now underway. We are then left with d and -e to complete all of major-3 in the low-200s. Cont’d below.

FB daily

Please note that EDTs are no stranger to FB as the weekly chart below shows: a massive EDT formed for 18 months up to late 2016. EDTs are common in 5th waves, thus this fits the picture well. Note the negative divergence on the weekly MACD, which hasn’t even given a buy signal (yet). The faster responding, and more accurate A.I. is however back up and on buy.

fb weekly

How to trade this: long FB with stop at $173. Sell target zone: $190-$200

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AMZN: Still on track for that elusive 300% extension at $1230-1240 🙂 As already shown mid-December (see here) and still shown as possible late-November (see here) albeit I’ve been hesitant because the long term risk/reward was getting smaller and smaller. Aggressive traders could still trade this. More about how to trade this at the end. Cont’d below.

AMZN DAILY

I always cross reference my daily, weekly and monthly charts to see if the EW-count on each time frame matches. In the case of AMZN it does, which gives me high confidence for the preferred wave patterns.

AMZN WEEKLYamzn monthly

How to trade this: Aggressive traders can long AMZN with a target zone of $1230-$1240 (very little upside left imho…). Stop loss can be set at  $1160 (or the %/$ you are comfortable with). Swing traders: raise stop similarly and set sell target zone similarly. Long-term investors: same deal. 

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NFLX: Never count the bulls out. The failed 5th top I had originally (see here) was incorrect and I am actually happy with that as those are so rare. Especially for a strong stock like this. From a trading perspective such a change in count is actually a bit trivial. Why? Well, I cant state it often enough, but it’s all about being on the right side of the trade: rinse lather repeat. Not about picking tops and bottoms. It’s about having the edge. And if the wave-count, TIs etc all suggest price may have topped it’s wise to listen. As I say: there’s always a next bus to catch (when the prior Bus seems to be running a flat, is low on gas, and the passengers are all getting off as well). That’s how trading dynamic markets work: adjusted and traded to it accordingly. Cont’d below.

NFLX daily

Anyway, both the daily and weekly chart has price now in intermediate-iii of major-5. Note, also this can morph into and EDT like FB but for now the charts say: higher prices to come.

nflx weekly

How to trade this: Aggressive traders can long NFLX again with a stop loss at $185 or set at certain % or $ level depending on comfort level. Price target zone: $230-$240. Long term investors should probably stay out of NLFX if already sold. If still long, scaling out at target zone can be done.

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GOOGL: The entire advance off the July 2016 low is starting to look a bit sloppy (overlapping) and my best interpretation is that an EDT is forming. Alternatively we simple have a 1,2 set up for minute-v. If price breaks strongly out over the upper grey trendline, which has held price in check for months, then the 1,2 count is operable. If it holds the current advance and price falls back to the lower trendline then we’re dealing with the EDT and we should look for the 200% to be reached at around $1113. Note that the daily OBV (on balance volume) has not (yet) confirmed the current advance as it’s lower now than in mid-December. Hence, volume is not confirming price… Cont’d below.

GOOGL daily

The weekly chart below confirms the EW count on the daily chart, but has a slightly higher price target for the current wave up: $1171. That should complete intermediate-iii and intermediate-iv should then drop back to about $930 before v takes price to new ATHs. Please remember that will “only” complete major-3 and major-4, 5 are then still left. With major-5 possible targeting as high as $1530s

googl weekly

How to trade this: aggressive traders can go long GOOGL with a sell target of $1130-$1170. Stop losses can be set at yesterday’s low: $1050. Swing traders: same deal. Long term investors: remain long GOOGL. If you can’t stomach the possible drop to $930, stops can be raised to $1130.

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BABA: Let’s start this one with the weekly chart, as it tells the story the best. Namely, the preferred count has (green) minor-5 of (red) intermediate-iii underway to ideally around $200. Price found support so far above the ideal support zone (green box) and is still well-above its 20w SMA: trend is up. In addition the weekly RSI5 was max overbought (OB) at the November price high, which is often a sign for a 3rd of a 3rd wave: minor-3 of intermediate-iii. Now I IDEALLY would like to see negative divergence develop on this RSI5 (see dotted red arrow) to start to suggest a larger correction is about to start; intermediate-iv. Cont’d below.

baba monthly

The alternate count is shown in the monthly chart below, which suggests (black) major-3 already peaked and now a bounce is underway. I find this count less likely, but it must be presented to be thorough and complete.  Cont’d below.

baba weekly

The daily chart shows the story in more detail and using the Fib-extensions we can see how price nicely tagged the 100% extension (typical 3rd of a 3rd wave extension: micro-3 of minute-iii) and micro-4 should now find support at the 61.8% level: $179.40. From there price can then target $191ish for all of minute-iii (138.20% extension). Ultimately, if price adheres to these standard Fib’s it will then reach the 176.40% extension at $198ish to complete the impulse pattern up and therewith intermediate-iii.  If price drops below $176 than we should expect lower prices and the count shown on the monthly chart (major-4) is then operable.

baba daily

How to trade this: Aggressive investors can long BABA from $179.50 with a stop at $175.50. Sell target zone: $195-200. Long term investors should stay long BABA and raise stops to $140-$150. Swing traders can follow the aggressive traders advice