Stocks Drop As Stay-At-Home Names Get Crushed
Michael Kramer | Apr 21, 2022 12:31AM ET
The market fell Wednesday, with most of the damage contained to the NASDAQ. The Invesco QQQ Trust (NASDAQ:QQQ) ETF dropped by more than 1.4% following Netflix's (NASDAQ:NFLX) move lower, resulting in a good portion of yesterday’s rally being erased.
The remaining balance of the gains is likely to vanish in the coming days as the Qs head back to $336.
It was much worse than that for many stocks in the market, with other stocks in that former stay-at-home trade collapsing. The ARK Innovation ETF (NYSE:ARKK) fell nearly 6% on the day, which erased all of the 4% gains from yesterday and more. The trend remains lower.
I think a lot of this was due to the weakness in Netflix, as investors were probably worried that other companies were going to face a similar type of mass exodus.
That is entirely possible; we won’t know until we see some of these results. But when there is uncertainty, investors sell, and they don’t have the patience to wait.
h2 Shopify /h2Shopify (NYSE:SHOP) fell 13.3% Wednesday, and was pounded even harder after it became known that the company was looking to make an acquisition for Deliverr in a $2b deal.
Perhaps this was a short-gamma squeeze at play, with the put volume surging and implied volatility and skew rising. The market doesn’t seem to like the idea that Shopify is going down the Amazon (NASDAQ:AMZN) route.
The other problem was that the stock isn’t cheap yet. It was getting there but still needed to see some further downside; I think $440 would be the next price to watch for here.
Get The News You Want
Netflix fell right into the January 2018 gap yesterday at $226, and that was where it stayed. It probably does a lot of nothing for a very long time, with a downside risk to $200.
Walt Disney Company (NYSE:DIS) also fell yesterday, as expected. It gapped below support at $127 and seemed to be well on its way to $117, as it fell in sympathy with Netflix.
Original Post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.