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Surging Facebook can’t keep tech afloat

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Trading Nation: Will it get worse for tech?

Facebook's roaring market performance is a breath of fresh air for the otherwise struggling tech sector, but traders say the tech wreck is far from over.

Even with the stock's 8 percent rise on Thursday, the large-cap Nasdaq 100 index is still down on the session, dragged down by Microsoft, Apple and Alphabet.

"In light of some pretty decent numbers, stocks have not responded that well," said Chris Verrone, a technical analyst with Strategas Research Partners. "I'm always a little nervous when things don't go up on good news, and the QQQ peaked about two weeks ago. They really haven't participated in this last leg up for the S&P, so we're starting to see some signs of exhaustion there."

The tech industry's staple names saw their numbers decline significantly post earnings reports. Apple plunged more than 9 percent over this past week while Microsoft and Google parent Alphabet lost $30 billion each in market capital. Facebook was an exception, crushing estimates by 15 cents a share and soaring to an all-time high while others in the QQQ struggled.

"When you look at this index, only 50 percent of the stocks in the QQQs are above their 200-day moving averages," added Verrone, referring to an ETF that tracks the Nasdaq 100. "So when we look at some of these names, whether it's Expedia or Netflix, there are some missing pieces that leave us a little bit uncomfortable about the index."

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Facebook had already traded 22 million shares on Thursday morning, setting the company on track to beat its 30-day average volume of 29 million shares. The social media giant also raked in more than $30 billion in market capital.

To be sure, other social media stocks such as Weibo and LinkedIn (set to report after Thursday's bell) did follow Facebook higher.

But Verrone surmises that "big picture, we are noticing some modest weakness from the overall group."