Facebook, Amazon Stocks Bounce Sharply From Key Technical Support

The FAANG stocks appear to have stabilized following recent sell-offs

Apr 5, 2018 at 3:15 PM
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The tech sector is helping to power the U.S. equities market to another day of big gains, and FAANG stocks -- Alphabet (GOOGL) notwithstanding -- are trading notably higher. Facebook, Inc. (NASDAQ:FB) and Amazon.com, Inc. (NASDAQ:AMZN) have been two of the higher-profile names in this group in recent weeks, and the shares are swinging higher today, even as a fresh batch of headlines hits.

Facebook CEO Says Ad Sales Not Impacted by Data Breach

Facebook stock surged almost 4.2% out of the gate, and was last seen trading up 2.5% at $158.99, after CEO Mark Zuckerberg said during a conference call yesterday that it doesn't seem ad sales have been negatively impacted by the recent data-harvesting scandal. He also noted data from up to 87 million users may have been shared with Cambridge Analytica without permission, and that the company is "probably a year into a massive three-year push" to fix the social media site.

More information will likely come to light when Zuckerberg heads to Capitol Hill next Tuesday for two days of congressional testimony, while the company is also expected to meet with U.K. Digital Minister Matt Hancock over privacy concerns. Separately, Australia said it is investigating Facebook for possible breaches of privacy laws, while the Kremlin accused the company of censorship, after it removed hundreds of accounts linked to a Russian "troll factory" that was indicted by U.S. prosecutors over its role in the 2016 U.S. presidential election.

After news of the data leak first hit in mid-March, shares of FB gave back nearly 16% in the second half of the month. However, the stock stabilized in the $152-$154 region, which coincides with four times its initial public offering (IPO), as well as a $450 billion market cap. Those looking to bet on a bigger bounce may be in luck, too. Facebook's 30-day at-the-money implied volatility of 14.3% ranks in the 94th annual percentile, meaning call options are pricing in lower volatility expectations than their put counterparts.

Amazon Stock Brushes Off Latest Trump Attack

President Donald Trump continued his tirade against Amazon today, tweeting earlier that the Washington Post -- which is privately owned by the e-tailer's CEO Jeff Bezos -- is its "chief lobbyist." This was just the latest in a string of Trump tweets directed at AMZN, but while the stock has previously reacted negatively, today, it's trading up 2.6% at $1,447.62.

After hitting an all-time peak of $1,617.54 on March 13, AMZN stock pulled back to its 80-day moving average. This rising trendline is currently docked near a 23.6% Fibonacci retracement of Amazon's post-election rally to record highs -- specifically, its surge from November 2016 to mid-March, when the shares more than tripled in value.

amazon stock daily chart april 5

Analysts, meanwhile, have remained upbeat toward Amazon. Of the 38 brokerages covering the shares, 34 maintain a "buy" or better rating. Plus the average 12-month price target of $1,670.66 stands at a 15.3% premium to AMZN stock's current price.


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