FAAMG - The real reason why Tech Stocks chose their moment to collapse


Since the Nasdaq 100 staged a reversal-signature exactly 1-week ago (Friday 9th June) from an all-time-high of 5907.50 (futures), pundits have attempted to explain why technology stocks collapsed.

Analysts were quick to issue their forecast revisions for some of the FAAMG’s, Facebook, Amazon, Apple, Microsoft and Alphabet (Google) – investment bank Mizuho lowered their targets for Apple Inc. from $160.00 to $150.00 retrospectively, Monday morning even though they commented that the timing of this release was a coincidence as the research took weeks to compile – the stock has since traded down to $142.21!

But there was a definitive lacking in fundamental logic – yes, commentators cited a frothy over-extended market but they’ve been saying that for weeks – that’s not a concrete explanation for the timing.

Here’s our explanation – Elliott Wave analysis identified 3rd wave completions into these highs. Apple Inc. hinted it was preparing for this decline over 2-weeks before it happened (see chart, left). It’s peak at 156.65+/- was already cited as ending its 3rd wave that began from last November’s low of 104.08 had completed late-May, opening the way for a corrective decline in a 4th wave towards $134.00+/-.

Apple Inc. vs. Google Inc (C)

Apple Inc. - Weekly vs. Google Inc (C) - Daily

Likewise, Google Inc. was also heading into a major peakElliott Wave analysis forecast an approach to important 3rd wave highs towards $997.12+/-, the actual high trading marginally short at $988.25 (see chart, right). Its 4th wave downside targets to $918.00+/- has already been realised to 915.23 – in fact, we shall be revising the completion even lower now.

Elliott Wave analysis combined with Fibonacci-Price-Ratios become an effective tool in forecasting, projecting these types of up-coming reversal-signatures.

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