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Remember FANG stocks? Investors are flocking back to major technology stocks like Facebook (FB) today.
The NYSE FANG+ index ($NYFANG) is up 2.7 percent in afternoon trading, its biggest gain since late January. That’s driving a big rally in the Nasdaq-100. Meanwhile the Nasdaq-100’s volatility index ($VXN.X) is crashing as fear leaves the market.
At least two big news events are explain the moves. First, Nvidia (NVDA) restored confidence in semiconductors by acquiring smaller chip designer Mellanox (MLNX). That suggested there’s still potential for growth in the space– even if Apple’s (AAPL) iPhone has peaked.
Speaking of AAPL, Bank of America Merrill Lynch upgraded the smart-phone giant. The analyst essentially said demand was stabilizing and enough bad news was priced in. His target price for AAPL, currently trading at $178.50, went up from $180 to $210.
Let’s take another look at the $NYFANG index. The “FANG” grouping started a few years ago with FB, Amazon.com (AMZN), Netflix (NFLX) and Alphabet (GOOGL). It then spread to other major growth names like NVDA and AAPL.
NYSE followed by launching $NYFANG as an official index in November 2017. Chinese e-commerce giants Alibaba (BABA) and Baidu (BIDU) were added, along with Tesla (TSLA) and Twitter (TWTR).
According to the prospectus, NYFANG seeks to “represent a segment of the technology and consumer discretionary sectors consisting of highly-traded growth stocks of technology and tech-enabled companies.”
Interestingly, some other stocks that potentially fit that bill are moving today.
First, Latin America’s Mercadolibre (MELI) and PagSecuro (PAGS) are up nearly 6 percent. Etsy (ETSY) rallied 5 percent and Carvana (CVNA) gained 7 percent. And, don’t forget about the broader Chinese technology group.
$NYFANG spent all of February has been trapped in a range as it pushed against its falling 100-day moving average. If current levels hold, it will be the second-highest close since early November. Are investors starting to fall back in love with this iconic group of stocks?
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