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If there ever was a perfect example of a bright, shiny object, it's the fabulous five known as the FAANG stocks - Facebook Inc. (Nasdaq: FB), Apple Inc. (Nasdaq: AAPL), Amazon.com Inc. (Nasdaq: AMZN), Netflix Inc. (Nasdaq: NFLX), and the "new Google": Alphabet Inc. (Nasdaq: GOOG).
Together, they comprise around 38% of the Invesco QQQ Trust, the tracking ETF for the Nasdaq 100.
No stocks receive more attention than FAANG stocks, especially around earnings time.
And with good reason. Their numbers are hotly anticipated and typically produce huge price swings (some might call them "overreactions") that have market pundits racing to see who can interpret the results first.
I prefer to let the dust settle a bit. Now that all FAANGS except Apple have reported (as I write this) and the initial reactions are out of the way, I'm using my Best in Breed system to analyze each to see where these stocks are headed.
There's no money to be made rehashing what happened and why. We're more interested in where these stocks are going and how we can profit.
Today, realizing that Apple is still a wild card, I want to look at the best (Amazon) and worst (Facebook) of the lot. Later this week, I'll analyze the remaining three. And, as usual, I'll give you some trade ideas to leverage my analysis.
Let's get started with the Best in Breed (so far): Amazon.
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About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.