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Balance sheet and cash flow strengths are expected to buoy Facebook, Inc. (NASDAQ:FB) through the coronavirus-related downturn

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Balance sheet and cash flow strengths are expected to buoy Facebook, Inc. (NASDAQ:FB) through the coronavirus-related downturn

Balance sheet and cash flow strengths are expected to buoy Facebook through the coronavirus-related downturn. In fact, the social media company is expected not only to survive, but to thrive.

“FB is benefiting from increasing user engagement as more people shelter in place,” Feinseth wrote in a note. “The COVID-19-driven global quarantine is making FB the number-one place for everybody to connect for social, entertainment, business, and information needs.”

The company’s swells come not only from external tragedy, though. Facebook’s security and location initiatives, Messenger App updates, and new features — Facebook Dating, Facebook News, Instagram Shopping, WhatsApp Payments — appear to be boosting the portfolio’s appeal.

“FB’s platform innovation continues to drive strong growth in active users,” Feinseth wrote. “The ongoing launch of new applications and services along with increased advertising revenue will continue to drive incremental user and revenue growth.”

Such growth is already being realized in Instagram Stories and Facebook Stories.

“FB has a significant upside driven by the ongoing potential to monetize many of its critical applications and technologies, including Instagram, Messenger, WhatsApp, and Oculus,” Feinseth wrote. “FB’s innovative abilities, along with strategic acquisitions to expand its services platform, will further enable it to realize more significant revenue opportunities and yields from its massive user base.”

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 187.52.

The projected upper bound is: 187.16.

The projected lower bound is: 144.22.

The projected closing price is: 165.69.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 77.4349. This is not an overbought or oversold reading. The last signal was a sell 0 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 47.59. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 10 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 126.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 8 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 4 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 0.850 at 166.800. Volume was 100% below average (consolidating) and Bollinger Bands were 79% wider than normal.

Open     High      Low     Close     Volume___
165.480 170.930 164.200 166.800 5,524
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 156.80 190.74 192.98
Volatility: 77 80 47
Volume: 27,941,888 22,680,726 16,353,601

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FACEBOOK INC A is currently 13.6% below its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 40 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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