Has the love affair with FAANG stocks ended? Just as Bank of America Merrill Lynch was pointing out that technology stocks started to become a crowded trade, along comes Morgan Stanley analysis that breaks down the beta factor performance models. In short, they see volatility ahead — which can disrupt existing momentum trades. When looking at the recent FAANG price breakdown, they consider the relative value analysis with the larger technology universe and are not as alarmed by the relative price move lower. [buffett] Morgan Stanley quants see volatility ahead — which typically isn’t positive for an existing price trend…
Morgan Stanley Quants: Volatility Ahead, FAANG Could Fall Much Further
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.