Internet Stocks: The No. 1 Internet Stock for 2017… and Beyond

This Internet Stock Has Big UpsideSociety’s ability to adapt to new technologies is staggering. The Internet revolution has taken the world by storm and the products that are stemming from this segment continue to grow. Cellular phones were only used for making phone calls, now we use them as portals to access the Internet. It is crazy now to even fathom a world without the Internet. As an investment theme, Internet stocks are poised for further growth.

I have yet to see a sector that can experience the type of growth that the Internet can provide. Social media has coined the term “going viral”. It is the process of sharing a piece of multimedia that spreads to millions of viewers in a matter of days, sometimes in a matter of hours. Internet stocks like Angie’s List Inc (NASDAQ:ANGI) are a direct beneficiary and can leverage from this phenomenon.

This Internet Stock Has Big Upside

Angie’s List is a local marketplace and consumer review site. They connect consumers with applicable trades and service providers, and they do it with a twist. Angie’s List offers members a fair price and a service guarantee. They effectively found a way to take the stress out of finding a quality service provider.

In the process, they have really made a name for themselves in a short amount of time, as word quickly spread regarding the outstanding product and service that they provide.

It is unfortunate that this Internet stock has not been the best performer, but there is evidence emerging that the poor performance is now in the past, and that a new trend of higher prices is developing.

The following chart illustrates the pattern that ended the bear market.

angie list stock chart

Chart courtesy of StockCharts.com

The pattern that ANGI stock developed soon after the initial public offering (IPO) is an ending triangle. This triangle is special; it is unlike other triangles and it signals a trend reversal.

An ending triangle is developed as two converging trend lines illustrate a narrowing of a price range. This pattern is very similar to other triangle patterns, but the location in the trend is what set this triangle apart from the others. Triangles by nature are very powerful patterns; as the pattern progresses, momentum builds as prices bounce off support and resistance.

On October 19, 2015, ANGI stock broke out of the triangle and this action ended the bear market and was the first step in setting up an uptrend.

The following chart illustrates the pattern that now supports a new uptrend.

angie list stock chart 2

Chart courtesy of StockCharts.com

ANGI stock has the preliminary points to set up an ascending channel. An ascending channel is defined by two parallel lines that define the upper resistance and lower support. The slope is positive on this trend and that constitutes an uptrend. The share price will oscillate between these two lines for as long as the trend permits.

A flag that is highlighted in blue appears within the channel. Flag patterns usually present themselves after an initial upswing. The upswing is known as a flagpole and, without a flagpole, a flag doesn’t exist. This is how one is to identify such patterns. These patterns are significant because they are continuation patterns, and are especially bullish when they lean against the predominant trend.

On August 17, ANGI stock broke out of the flag formation and reasserted the bullish trend. Higher prices are the path of least resistance, and a test of the upper resistance line is expected.

The Bottom Line on This Internet Stock

The Internet has become a direct staple in out lives. Internet stocks are a great way to capture the exponential growth that this sector can provide. Angie’s List is a prime example of a small company that quickly took off after news spread regarding the services they provide. Angie’s List is an Internet stock that is now in an uptrend, and the charts support this premise. Higher prices should prevail for as long as the channel permits.