The long run in the so-called FANG stocks (Facebook, Amazon, Netflix, and Google) has struck a pocket of institutional turbulence. The importance of these technology leaders is unquestioned and all four are built into countless individual and fund portfolios, as well as ETFs. Concern has grown that when the FANG trade bursts, the selling could topple markets.
Through the majority of 2017, all four FANG stocks were favorably imbalanced to the demand side by institutional investors. However, that imbalance has begun to shift and Facebook and Alphabet/Google are currently experiencing institutional outflows.
Looking at three of the four FANG stocks above, the LSI line trajectory of Facebook began to turn negative with the spike at 1 in November 2017. The selling culminated at spike 3 on March 18 with widespread news of a user breach. For Google, the institutional sell imbalance began with the downturn in early February and has not abated since. Netflix and Amazon remain favorable from an institutional perspective with the presence of a demand imbalance (green lines) in Netflix shares as seen above.