The S&P 500 index, Dow Jones industrial average and Nasdaq composite rebounded strongly last week, retaking their 50-day moving averages as the market returned to a confirmed uptrend. But Facebook (FB), facing a more competitive Snapchat, owned by Snap (SNAP) and Twitter (TWTR), barely rose, stuck below its 50-day. Facebook appears to be taking over the mantle of quiet big-cap tech laggard from Apple (AAPL), which has started to bounce back.
Here’s a look at how Facebook and Apple are faring.
Facebook hit a record high on Feb. 1, as the major averages and other leading stocks were starting to build up problems, leading IBD to change the market direction to uptrend under pressure. Facebook’s relative strength line, which tracks the stock’s performance vs. the S&P 500 index, was not at an all-time high. The RS line, the blue line in the chart below, had not made much headway since late July.
After Feb. 1, the market sold off sharply, but Facebook fell even faster, with the RS line falling. When the market began to rally from Feb. 9, Facebook rose, but not as strongly, especially this past week. RS line now at lowest in several weeks, not far from mid-January’s seven-month low.
Not coincidentally, Facebook’s smaller rivals Snap and Twitter reported strong results. Snap late on Feb. 6 reported better-than-expected revenue and user growth in the fourth quarter while its adjusted loss was less than expected. Snap shares skyrocketed 48% on Feb. 7, blasting out of a consolidation to an eight-month. This past week, eMarketer said Facebook is losing young users to Snapchat at a faster rate.
Twitter had strong numbers early on Feb. 8, including its first-ever profit on a GAAP basis. Twitter shares shot up 12% that day and have continued to trend up, trading at their best levels in 30 months. With Facebook downplaying news, Twitter could see further gains.
As for the other FANG stocks, Amazon (AMZN) and Netflix (NFLX) are still big winners with their RS lines at or near record highs. Google-parent Alphabet (GOOGL) is not really leading or lagging. Alphabet shares were unable to close above their 50-day lines on Friday, at least not the GOOGL ticker. The Alphabet (GOOG) class shares are above that support.
Apple
Apple was a big laggard from early November to Feb. 2. For much of that time Apple shares were moving sideways while the S&P 500 and other major averages were moving sharply higher. Finally in the latter half of January, Apple’s stock began falling steadily, especially after the market peaked, with the RS line hitting an 11-month low.
But since Feb. 2, Apple’s stock has been outperforming the market. Last week Apple surged 10%, more than doubling the S&P 500’s gain, retaking the 200-day and then the 50-day line. Keep in mind that Apple’s RS line has a long way to get to new-high ground, and the stock’s surge may run out of steam.