Facebook, Inc. (NASDAQ:FB) can reform keep the U.S. and EU happy?
Facebook (NASDAQ:FB) has been able to escape a lot of issues for a very long time, simply because of its massive base. The social media giant has great technology to be sure. And for the size of it, FB stock has spent plenty of time, money and energy making sure the platform is secure.
Facebook’s issues at this point are more internal than external, and the markets don’t like uncertainty. There are significant privacy concerns, and while those don’t really move the needle in the U.S., they do in Europe and other countries.
After building a model that is generating significant revenue, these kinds of issues can be crippling.
Remember that when FB stock went public, there was a huge amount of excitement for all the possibilities of turning this free social media service into a massive business. Investors were looking at the potential of having — at current count — 1.5 billion daily active users and 2.2 billion monthly active users.
The real challenge now for FB stock is whether it can reform enough to keep the U.S. and EU happy but at the same time generate enough value from its users to keep revenue growing.
There are also a growing credibility issue and demographic challenge with Facebook moving forward.
Regarding credibility, Facebook leadership has said numerous times it wasn’t doing anything wrong — and then it was caught doing exactly that. When you’re testifying before Congress and lying to Senators, it doesn’t make life easier.
As for the demographic issue, Facebook isn’t the hip app for youngsters it used to be. Instagram and WhatsApp are really the ones that are continuing the growth for FB stock.
But there are plenty of competitors and if FB ends up getting hit by regulators and some of its less savory business practices are exposed, you could see a quick shift in users preferences.
That’s why my Portfolio Grader has FB currently at a D rating. There’s too much risk to step in right now and if you’re holding it, there may be more downside left.
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 155.21.
The projected upper bound is: 149.86.
The projected lower bound is: 130.35.
The projected closing price is: 140.10.
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 25 white candles and 25 black candles.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 91.1879. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 6 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 46.74. 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 6 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 35. This is not a topping or bottoming area. The last signal was a buy 4 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 1 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 1.930 at 140.610. Volume was 8% below average (neutral) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume___
138.260 140.966 137.360 140.610 25,732,576
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 135.75 150.28 172.86
Volatility: 51 42 46
Volume: 28,574,136 26,404,436 27,668,718
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.
FACEBOOK INC A is currently 18.7% below its 200-period moving average and is in an downward trend. Volatility is low 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 49 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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