Chart of the Day: "The" Facebook

JC Parets
August 3, 2022

When the worst stocks on the planet can't go down any more, that's usually good information.

We saw a lot of Small-cap Growth, Arkk Funds, Biotech, Chinese Internet and many of those other "Growthy" areas bottom out this Spring, and some of the last ones in June.

At the Mega-cap level, nothing caused more shareholder wealth destruction than Facebook, down 60% from its highs less than a year ago.

But look where prices stopped falling:

You've got a combination of former support levels and the 61.8% retracement of the entire rally since 2012.

Here's what it looks like when you zoom into that level

If one of the biggest companies on the planet, which had been a leader to the downside for so long, can't go down anymore, what does that say about Communications as a Sector, and even the market more broadly?

These are the "Culprits". We point to a losing stock like this as a poster child for this particular bear market, along with ARKK and others like it. This is very similar to Financials and Homebuilders during the 2008 bear market, for example.

So if the Culprits can't fall in price any longer, what's an investor to do?

We discussed all of it on this week's Live Conference Call.

Premium Members can find the video recording here and also download all the slides.

Enjoy!

Give us a call if you are not a Premium Member and would like access to the video and charts: (323) 421-7910

- JC

 

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