Jump to content

Nasdaq 100 and FANG Index stock prices suggest value at current levels

Recommended Posts

Recent corrections in equity markets suggest the Nasdaq 100 and FANG Index stocks could be offering value at current levels.

Nasdaq 100Source: Bloomberg
 Shaun Murison | Senior Market Analyst, Johannesburg | Publication date: Monday 23 May 2022 

The following article looks at the recent moves of tech shares making up the largest part of the Nasdaq 100 as well as the entirety of the FANG Index, assessing whether these counters currently offer a relative value in the market place.

The US FANG Index

The FANG Index is an equally weighted index, rebalanced each quarter, comprising the following stocks:

- Alibaba

- Alphabet (Google)

- Amazon Inc.

- Apple Inc.

- Baidu

- Meta (Facebook)

- Microsoft Corp


- Tesla

Why have tech stocks been under pressure?

Since reaching all-time highs in November 2021, the US FANG Index has fallen roughly 40%.

As global monetary policy starts to tighten we have seen equity markets under pressure with interest-bearing assets becoming increasingly more attractive.

In terms of equity markets, tech shares representing mostly stocks primed for growth, have been significant underperformers. A number of these stocks (such as Netflix and Amazon), while beneficiaries of the pandemic and in turn lockdown behaviours, have now seen earnings normalising as the global economy opens up and behaviours change.

Dual-listed stocks (US and China / Hong Kong) have seen further pressure mounting from uncertainty pertaining to Chinese regulations. Supply chain bottle necks from lockdowns in China and the ongoing war (halting of operations in Russia) provide continued disruption to markets and the sector in particular.

Are tech stocks offering at current prices?

But while prices have dropped dramatically, investors will be looking to assess whether these tech sector counters are starting to offer some opportunity in the marketplace, with recent declines possibly providing a relative value in what has been historically a sector primed for growth.

The below table sees data compiled from Refinitiv Workspace as of the 23rd of May 2022. The data pertains to the stocks currently making up IG’s FANG Index and looks at a consensus of long-term broker ratings, price targets, and ascertains the level at which current prices trade at a discount or premium to these targets.

Data tableSource: Refinitiv Workspace


With the exception of Netflix (which carries a ‘hold’ recommendation) all the constituents of the US FANG Index carry a long-term ‘buy’ rating.

Alibaba, NVIDIA and Netflix currently trade at the deepest discounts to the consensus of long-term analyst price targets. Alibaba, BAIDU and Meta trade on the most conservative forward price-to-earnings (P/E) multiples of the index constituents, while Amazon and Tesla currently trade on the more expensive side in terms of the P/E valuation metric.

US FANG Index – technical view

US FANG Index chartSource: ProRealTime


IG’s US FANG Index highlights the recent carnage within the tech sector. Short, medium, and long-term trends for the index remain down at present. However, we have started to see some indications that the index could be setting up for a short to medium-term rebound.

The highlighted area on the chart is considered a falling wedge pattern. The pattern suggests that the short to medium downtrend could be losing momentum and setting up for a rebound. Traders will want to see an upside break above the 5150 resistance level to confirm the near-term reversal as ‘in play’. In this scenario, 5725 and 6405 become upside resistance targets from the move.

Should the index price instead move to close below wedge support, the bullish indications would be deemed to have failed and instead a downside continuation assumed, with 4125 the next level of support considered.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Crypto enthusiasts seeking high returns on their digital assets should look no further than Bitget's innovative PoolX event. This platform offers a unique opportunity to earn attractive APRs by pooling liquidity for various projects, providing participants with a chance to diversify their portfolios and maximize their earnings. In May 2024, Bitget PoolX witnessed impressive APRs across multiple projects. The image shows that USDT APR soared to 75.48%, while BTC and ETH APRs stood at 35.09% and 31.46%, respectively. These remarkable figures highlight the potential for substantial returns through PoolX participation. Other notable projects included ONG APR at 25.76%, NYAN APR at 22.25%, and APU APR at 16.61%. Even lower-ranking projects like DAOT, HODL, KATT, WSDM, and UDS offered respectable APRs, ranging from 14.9% to 12.73%. The success of the exchange PoolX lies in its ability to facilitate liquidity provision for various projects, allowing participants to earn rewards in the form of attractive APRs. By contributing liquidity to these pools, users not only support the growth of promising projects but also benefit from the potential upside as these projects gain traction and popularity. Looking ahead, the exchange PoolX is gearing up to introduce even more exciting projects in the coming months. Participants can expect a diverse range of opportunities, spanning various sectors and use cases within the crypto ecosystem. By staying up-to-date with the platform announcements and participating in these upcoming pools, users can position themselves to maximize their earnings and capitalize on the rapidly evolving crypto landscape.  
    • Wheat Elliott Wave Analysis Function - Counter Trend Mode - Corrective Structure -Zigzag for wave (B) Position - Wave A of (B) Direction - Wave A is still in play Details -  As it appears the decline from 720’4 will most likely continue lower, we have adjusted the previous count. Price is now very likely in wave A of (B) against the 523’6 low. Wheat Elliott Wave Analysis Since late May, wheat has declined over 14% from 720, indicating that the commodity has retraced approximately half of the impulse rally that occurred between March 11th and May 28th. In the medium term, the move from March 11th remains a positive correction of the long-term bearish trend that spanned from March 2022 to March 2024—a two-year trend.   Daily Chart Analysis: On the daily chart, wheat completed a bearish impulse wave from March 2022 at 523’6 in March 2024. Following this trend, a corrective phase was anticipated in the opposite direction. The impulse reaction that concluded wave (A) at the May 2024 peak is part of this larger bullish correction. Given that wave (A) is an impulse, we can expect at least a zigzag structure or possibly a double zigzag if the bullish correction extends over several months. Following the path of least resistance, a simple zigzag structure—wave (A)-(B)-(C)—is highly probable. Currently, the price is correcting wave (A) downwards in wave (B). Provided that the ongoing decline stays above 523’6, an extension higher is expected. However, wave (B) does not appear to be finished yet, as evident from the H4 chart.   H4 Chart Analysis: On the H4 chart, the price seems to be in wave A of (B), which is evolving into an impulse structure. We anticipate a typical zigzag structure for wave (B). The invalidation level at 523’6 should not be breached. If it is, the long-term bearish trend from March 2022 will likely resume, confirming that the bullish correction from March 2024 has concluded.   Summary: Wheat has seen a significant decline since late May, retracing half of its recent impulse rally. The medium-term trend from March 11th remains a positive correction within the context of a long-term bearish trend that lasted two years. On the daily chart, the completion of the bearish impulse wave in March 2024 was followed by a bullish correction, which is currently in wave (B) of a zigzag structure. The H4 chart suggests that wave A of (B) is forming an impulse structure, with expectations of a typical zigzag correction.   Traders should monitor the key level of 523’6. If this level holds, the bullish correction is likely to continue with a potential extension higher. However, a breach below 523’6 would invalidate this scenario, signaling a continuation of the long-term bearish trend.  Technical Analyst : Sanmi Adeagbo Source : Tradinglounge.com get trial here!  
    • ZkSync leverages zero-knowledge proofs to improve Ethereum's scalability, offering faster transactions with lower fees. Its use of zkRollups positions it as a promising solution for decentralized applications and DeFi platforms. On Bitget, traders can engage with ZkSync, taking advantage of the exchange's features like a user-friendly interface and robust security measures. While ZkSync presents an opportunity for growth, it's important for investors to conduct thorough research and consider the project's long-term potential in the evolving crypto landscape.
  • Create New...