It’s time to check in on the FANG stocks, the most widely followed group of equities on the planet.

This group is so popular and well known it even has its own index – the NYSE FANG index — and its own pair of high leverage ETF-style trading vehicles.

Technically speaking, we may want to put aside FANG and use FANGAM, a slightly clunkier acronym that has also been around awhile because of the original names it includes.

FANGAM not only makes room for Apple and Amazon, it adds Microsoft, which now vies with Apple (AAPL) for the title of most valuable company by market cap.

The FANG stocks represent some of the most profitable companies that have ever existed. These stocks are widely held in part because so many money managers and individual investors feel they are “must own” type names, and also because genuine growth stories are now so hard to find elsewhere.

Even Warren Buffett, perhaps the most famous investor in history, has loaded up on a FANG name. Buffett and his portfolio managers are big fans of Apple, which has become so cash-rich and brand-dominant, it is now possible to see Apple as a value stock and not just a tech stock.

The FANG stocks are also incredibly deep and liquid. There are vast numbers of shares available, in part because the total market cap of these names runs well into the trillions of dollars. This depth, in turn, attracts more investment, attention, and liquidity in a self-reinforcing feedback loop.

The price action in the FANG stocks shows what a strange year it has been, and how challenging the month of November was for investors.

As of the Nov. 29 close, five out of the six FANGAM names (to use the expanded acronym) had positive gains for the year – with Amazon (AMZN) up more than 43%, Netflix (NFLX) up more than 50%, and Microsoft (MSFT) up almost 31%.

That sounds like excellent performance — until you realize that, based on percentage declines from their all-time high point, all the FANGAM names except MSFT had recently triggered bear market status!

As of the Nov. 29 close, AMZN was almost than 18% from its all-time high, and had been down significantly more than that earlier in the month.

Netflix was down more than 31% from its high and Google (GOOGL) more than 14% — again with worse drawdowns than those earlier in the month.

Meanwhile Facebook (FB), the dog of the FANGS, was recently down more than 36% from its all-time high after a particularly rough year.

While the FANGS have traded like a group in investors’ minds, we are starting to see the unique factors of each name exert more dominance. It is likely that, in the coming year, the FANG names will stop trading in a strong correlation to each other and more clearly go their separate ways.

Within the FANG group — or rather FANGAM, to include Microsoft and Apple — we can also see unique narratives developing for each name. That sense of uniqueness could be pronounced in 2019.

Facebook, for example, appears to be the name facing the most serious trouble. Facebook’s leadership has been under siege for months, particularly CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg, as privacy missteps and data breaches have come to light along with questionable decisions from the executive suite.

Facebook is now struggling, to a far greater degree than the other FANG names, with the threat of regulation from Washington and the rising cost of security measures to police its platform.

Amazon meanwhile has seen a significant retracement from its peak, with founder and CEO Jeff Bezos making the wrong sort of headlines for losing $19 billion in one day. But Amazon continues to be one of the best positioned of all the FANG names.

The Amazon narrative is so powerful — given its dominance in the cloud and expanding e-commerce capabilities — that even a handful of long-time value investors own it (though not Buffett) on the justification that Amazon is still “cheap” relative to growth prospects. Amazon also has very high trust perception with the American public, and continues to innovate at a blistering pace.

There were loud complaints over Amazon’s selection of its second headquarters, which wound up being split between the outskirts of two wealthy metropolis hubs (Washington, D.C. and New York City). But the call was a smart one for Amazon, and the company is going from strength to strength in new innovative areas like healthcare and digital wallets.

Netflix is one of the biggest winners of 2018, but is starting to falter under the gravity of its own weight. The company is spending billions of dollars in borrowed money to grow as quickly as it can, in the hope of building a global show and movies catalog that can help achieve escape velocity from the likes of ruthless competitors like Disney (which wants to start a “Netflix killer” competitive service).

One of the unique problems Netflix faces is the increasing lack of ability to properly promote its new shows; there are so many new shows appearing on the platform, there simply isn’t time or room to try to advertise them all.

Netflix investors continue to treat earnings calls as a situation for euphoria or despair, with almost no middle ground, based almost solely on the reported number of new subscribers (and the perception of whether NFLX is still growing fast enough for investors’ taste).

Google, owned by its larger parent Alphabet but still trading under the Google stock ticker, continues to be an advertising juggernaut, with attractive new business possibilities in sibling entities like the Waymo self-driving car division.

But Google’s biggest issue at the moment, apart from catching up with Amazon in smart home speakers and cloud services and fending off regulatory pressures in Europe, is dealing with internal fallout from employee protests and dissatisfaction.

The year 2018 was a winter of discontent for many Google employees, with protest topics ranging from unequal pay and treatment of minorities and women to the morality of building a censored search engine in China.

Moving on to Apple (AAPL), the giant tech stock favored by Warren Buffett has seen better days. The problem for Apple, and the reason AAPL is in official “bear market” status (down more than 20% from its recent highs as of Nov. 29 close), is the growing sense that the high-end smartphone market has peaked.

Apple was hit hard in recent weeks not just by disappointing earnings, but by a number of iPhone component suppliers cutting earnings forecasts or lowering projection numbers as well, reinforcing the notion that the world is reaching a level of saturation with smartphones that is negative for Apple.

Saving the best for last, the newly mighty Microsoft (MSFT) is the only FANGAM stock that is trading in the SSI Green Zone as of this writing. All of the other FANGAM stocks are red.

Thanks in part to its green zone trend, Microsoft has nosed past Apple in market cap, at $847 billion compared to Apple’s $845 billion in recent trading.

Apple was the first of the FANG names to cross the $1 trillion market cap, but then backed off again; not long afterward Amazon achieved the same feat. Now, though, the 43-year-old Microsoft is poised to become the biggest market cap of all, an impressive feat for CEO Satya Nadella.

Microsoft managed to keep its relevance and dominance not just by expanding aggressively into new businesses like cloud services, but by staying hard-nosed about prior investments and cutting away ruthlessly what no longer worked. As a result of this drive and focus, MSFT is now back on top.

Also as of now, the only name in this group we can feel good about is MSFT. All the others are stuck in the SSI red zone, having triggered “bear market” status even while most FANG names are still up for the year (some of them substantially).

Two of the problems with trading the FANG stocks safely are valuation and liquidity. Both factors can lead to big swings and larger-than-expected volatility in these names.

The valuation issue has to do with extremely high price-to-earnings ratios, which can sometimes seem attached to nothing at all.

A stock that is trading at X, where X represents an astronomical or outlandish valuation, can sometimes trade at two times X or one-half-of X with the exact same justification (or no justification at all). Because the PEs in the FANG names are so stretched, there is more risk they could contract (and shares decline).

The liquidity issue comes from the fact that, as some of the most popular investing and trading vehicles in the world, there is a large amount of investor and mutual fund manager capital “parked” in the shares of the FANGs at all times.

A challenge here is that, when Wall Street is gripped by a general moment of fear or panic, areas of high liquidity (like the FANG stocks) tend to be one of the areas tapped first for emergency funds.

When a group is liquid enough for asset managers to have hundreds of billions of dollars’ worth of capital in that group, it does not take much for a large portion of funds to be swept out, particularly during normal “reversion to the mean” episodes under tightening monetary conditions.

In conclusion, the FANGAM names are still very much a group to watch, with a lot of powerful (and sometimes frightening) innovation coming out of Amazon, Apple and Google.

All of the FANGs, furthermore, are fascinating and well-run dominant companies, with big opportunities and equally big challenges ahead.

Based on the discipline of respecting trends, however, we have to narrow our bullish investment window to MSFT alone, as the only group name with a bullish stock state indicator (SSI) at this time.