The FANG stocks have under pressure. Lately, they had a big sell-off that was followed by a small bounce, and then they sold off again. It’s probably not a big deal, but the price action in these stocks before this week was very smooth and now they are loose and volatile. Typically, or at least in the past went the price action goes from smooth sailing to loose and volatile it signified a trend change, we’ll see.
On another note, I still continue to see decent swing set-ups on the long side from smaller mid-cap names. Part of the reason is that the Russell 2000 has been acting very constructive lately.
I have an interest in these stocks on the long side if and only if they go through yesterday’s high plus .10-cents. This single criterion will narrow down the list and get you involved only in the stocks that are on the move. The primary drivers of stocks in the short term is momentum and mean reversion. Stocks that have a significant move in the short term tend to rest and move sideways for a few days and then resume higher more often than not. These momentum bursts typically last 1-10 days.