Tech stocks diverging in 2018: BofAML trade idea

Traders
may be able to profit from a divorce in tech
stocks.
Spencer
Platt/Getty

• US and Chinese tech giants are a lot more divorced from
  each other this year than they were in 2017, Bank of America
  Merrill Lynch derivatives analysts have observed.
• They recommend a trade that could profit from the split
  between the FAANG + BAT stocks.

The biggest US and Chinese tech stocks meld together into a
convenient acronym: FAANG + BAT.
But their fortunes are anything but similar right now.

Facebook, Amazon, Apple, Netflix, the Google parent Alphabet,
Baidu, Alibaba, and Tencent are trading this year in ways
representing a sharp turn from their harmony in 2017, Bank of
America Merrill Lynch has observed.

“A profound shift appears to be underway towards more divergent
returns on an individual basis,” a team of derivatives analysts
led by Stefano Pascale said in a client note on Tuesday. …

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