Yesterday’s correction, although very unpleasant for those who are in long positions in Technology, is still just one of the similar ones, of which there were a lot over the past year, and is not out of the general row.
Moreover, in the coming days, the drawdown may even go a little deeper than we saw yesterday. This is one of the main signs of a healthy market.
FAANG shares (Facebook, Apple, Amazon, Netflix, Google) behaved yesterday, just like almost all other shares of the Technology sector – they fell along with the sector, namely:
- Facebook -4%
- Apple -2.1%
- Amazon -2.7%
- Netflix -4.1%
- Google (Alphabet) -2.4%
We do not single out the fall specifically in the shares of these companies from the general, nor do we see fundamental reasons for the fall. On the contrary, we are still positive about the prospects of these companies (as well as many others from the technology sector) and recommend using the current correction as an opportunity to buy good quality stocks with still impressive growth prospects for cheaper.
However, market risk is the same for everyone.
Obviously, goal number 1 in this case is the technology sector in the broad sense and FAANG in particular. The same goes for a phenomenon like sector rotation.
We do not see any reason for panic yet and urge that the correction be regarded as just another correction in the technological sector: to consider this as an opportunity to buy shares in promising companies cheaper.
You should always keep in mind her opportunity and try to hedge long positions in stocks.