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“Big Tech” stocks like Apple (AAPL), Amazon (AMZN), and Alphabet (GOOG) (GOOGL) have taken a breather over the past few days after reporting earnings last week. It’s important to note, however, just how much these stocks had rallied leading up to their near-term highs last week.
Through last Thursday, the NYSE FANG+ had rallied 34.44% over the prior month. That was actually its biggest month-over-month rally in the index’s history dating back to 2014!
As shown below, the index managed to make a “higher low” in early January just before it took off, and it just barely took out its highs from last August when it peaked last week before pulling back slightly.
While last week’s earnings results provided some negative fundamental catalysts, there is also the technical aspect that this group of stocks had gotten historically overbought.
At last week’s highs, the 14-day RSI reached 77.4. Normally, any reading above 70 would be considered overbought. At 77.4, the RSI reading for the NYSE FANG+ index was the most elevated since June 2021 and ranked in the 97th percentile of all days since 2014. After further declines to start out this week, the RSI is still elevated, but back below 70.
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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