Facebook, Inc. (NASDAQ:FB) company management is taking measures to overcome obstacles
Facebook (NASDAQ:FB) shares have declined 38% since July, and a growing number of issues have led to this decline, including regulatory pressures, data scandals, lower projected revenues by the company management in earnings conference calls and the broad market negativity.
To add salt to the wound, some well reputed brokerage firms and investment banks have lowered their price targets for Facebook, over the last couple of months. Since then, two camps have emerged in the investing community, with two contrasting views on the future of Facebook. One camp believes that Facebook will continue to shred its market value and company profits will decline, and on the contrary, the other camp believes that Facebook’s decline was undue and irrational, and Facebook will continue to gain its footing and remain the number one advertising platform of the world. In this analysis, I try to identify the reasons behind the share price crash and what the company management is doing to overcome the difficult times and achieve sustainable growth in profits. Thereafter, I focus on assigning a buy/sell rating to the company, based on an intrinsic value estimate.
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 148.71.
The projected upper bound is: 145.84.
The projected lower bound is: 122.44.
The projected closing price is: 134.14.
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 41.3252. This is not an overbought or oversold reading. The last signal was a buy 1 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 45.71. 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 23 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 -56. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 4 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 0.340 at 134.520. Volume was 20% above average (neutral) and Bollinger Bands were 16% wider than normal.
Open High Low Close Volume___
132.440 134.990 129.670 134.520 31,202,508
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 135.73 142.70 169.22
Volatility: 79 53 49
Volume: 33,657,368 27,310,640 28,637,150
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 20.5% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 3 periods.
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