Facebook, Inc. (NASDAQ:FB) clear history feature could slow ad revenues, but there are upsides

Facebook, Inc. (NASDAQ:FB)  clear history feature could slow ad revenues, but there are upsides

Facebook, Inc. (NASDAQ:FB) clear history feature could slow ad revenues, but there are upsides

Among companies that have suffered PR controversies over the trailing year, nobody was in the spotlight as much as Facebook (NASDAQ:FB). Initially, the social-media giant courted criticism for allowing a politically biased research firm to allegedly assist Donald Trump’s successful electoral campaign for president. Later, Facebook stock tanked after investors panicked over its “disappointing” second-quarter earnings result.

But the hits didn’t stop there. Pouring gasoline on a dumpster fire, The New York Times reported that Facebook allowed companies to access users’ private messages. According to the damning expose, these corporate partners included big names, like Netflix (NASDAQ:NFLX) and Spotify (NYSE:SPOT). Not surprisingly, FB stock ended 2018 in the doldrums.

Fundamentally, though, Facebook offers strength in multiple lucrative sectors. That’s one of the catalysts that have spiked Facebook stock 27% this year. Offering better advertisement reach and overall stability than either Snap (NYSE:SNAP) or Twitter (NYSE:TWTR), FB stock finally found its groove. However, its “clear history” function casts a dark cloud.

Why You Shouldn’t Panic-Sell Facebook Stock

Don’t forget that these troubling surveys — at least from the perspective of FB stock — are not conclusive. A few years back, a Gallup poll declared that millennials aren’t terribly worried about data security.

Although this poll came out before the Cambridge Analytica fiasco, I give their analysis more weight. That’s because despite the #DeleteFacebook campaign, few actually went through with it. Sure, several users took a break, while others deleted the app from their phone.

But a permanent separation? If the supposed anger at Facebook had substance, it didn’t show up in recent earnings reports.

Most analysts and investors likely view the Facebook clear history function as a negative for understandable reasons. However, I can make a case that it benefits Facebook stock.

How so? You must remember that due to its massive size, FB’s user-growth potential has reached maturity. Moving forward, the emphasis isn’t on outright gains, but cultivating the relationship. Therefore, the company’s marketing machinery must transition from attraction to retention.

As I stated previously, management has been fortunate: people haven’t left in droves as they initially threatened. However, the organization can’t take this dynamic for granted.

To alleviate that pressure, Facebook is giving internet users what they want. The same Pew study indicated that 91% of adults felt a loss of control over their digital privacy rights. By returning that highly demanded control, management scored a PR victory for once.

Bottom line: don’t panic on FB stock. The clear history situation is just a necessary step in the social-media giant’s journey.

Overall, the bias in prices is: Upwards.

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

The projected upper bound is: 175.44.

The projected lower bound is: 150.89.

The projected closing price is: 163.17.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

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 64.6612. This is not an overbought or oversold reading. 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 56.75. 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 sell 13 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 -61. This is not a topping or bottoming area. The last signal was a buy 3 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 sell 9 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -1.320 at 162.810. Volume was 48% below average (neutral) and Bollinger Bands were 29% narrower than normal.

Open High Low Close Volume___
162.900 163.930 160.410 162.810 12,697,485

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 162.89 150.01 166.27
Volatility: 17 54 49
Volume: 14,526,573 23,687,376 24,159,748

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 2.1% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 bullish on FB.O and have had this outlook for the last 35 periods.

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