Stocks Drop As Stay-At-Home Names Get Crushed
2022.04.21 08:20
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.
Invesco QQQ Chart
ARKK ETF
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.
ARK ETF Daily Chart
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.
Shopify
Shopify (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.
Shopify Daily Chart
Netflix
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.
Netflix Daily Chart
Disney
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.
Disney Daily Chart
