Alphabet Inc, Facebook Inc Can't Capitalize on Loeb Love Amid 'FANG' Headwinds

Daniel Loeb's Third Point increased its stake in Alphabet Inc (GOOGL) and Facebook Inc (FB)

Nov 11, 2016 at 12:18 PM
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It's been a bad week to be a "FANG" stock, amid the perception that President-elect Donald Trump is anti-tech. The pressure is again hitting Alphabet Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB), despite Daniel Loeb's Third Point upping its stake in both tech giants. Below, we'll take a closer look at each stock's recent struggles, and how options traders have been placing their bets.

At last check, shares of GOOGL are down 1.2% at $771.25. Since Trump triumphed in the presidential election, the stock has sunk 5% -- though, as recently as Oct. 28, it was hitting record highs. Where the equity goes from here could be determined by its 160-day moving average, which has so far contained its downside moves in November, after serving as resistance in May and June.

Bearish betting has picked up on GOOGL lately. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.88 ranks only 8 percentage points from a 12-month high. However, given Alphabet Inc's long-term strength, a portion of these put positions could have come at the hands of shareholders hedging against short-term volatility.

Turning to FB, the stock is down 2% at $118.30, and since its Election Day settlement, has also given up about 5%. What's more, the shares may have lost their foothold at the 160-day moving average, and are currently testing their 200-day trendline -- which proved a boon back in January. In fact, since FB's January lows south of $90, it's gained more than 32%.

As with its "FANG" counterpart, Facebook Inc has seen an uptick in bearish betting of late. The tech stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.78 rests just 3 percentage points from a 52-week peak. Likewise, FB's Schaeffer's put/call open interest ratio (SOIR) of 0.72 outstrips 92% of all readings from the prior year. Again, though, it's unclear whether put buyers are actually bearish toward the underlying, or are simply shareholders protecting paper profits against an unforeseen pullback.

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