Home US Stocks Facebook Facebook, Inc. (NASDAQ:FB) Cut Ad Rates as Pandemic Sank Demand

Facebook, Inc. (NASDAQ:FB) Cut Ad Rates as Pandemic Sank Demand

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Facebook, Inc. (NASDAQ:FB) Cut Ad Rates as Pandemic Sank Demand

Advertising spending on Facebook (NASDAQ: FB) has taken a big hit amid the COVID-19 pandemic, and the company has cut the rates it charges for those ad in recent weeks.

Citing companies that run ads on the tech company’s platform, The Wall Street Journal reported an ad that gets in front of 1,000 Facebook users cost 15% to 20% less in March compared to February. Wpromote, a digital marketing agency that handles $130 million in yearly ad spending on the social media platform, told The Wall Street Journal that Facebook’s rates have declined 25% from February to March.

Meanwhile, 4C Insights, a marketing company that manages $350 million in ad spending on tech platforms, said ad costs on Instagram to get in front of 1,000 users dipped 22% in the same period. Total ad spending on Facebook and Instagram at 4C was up 2% month-over-month in March. But in normal times, the company would expect to have seen a 10% month-over-month increase.

While Facebook has seen a huge uptick in usage and engagement as hundreds of millions of people turn to the social media giant to get information about the pandemic, that hasn’t translated into an increase in ad spending. In late March, Facebook warned that it’s seeing a weakening ad business in those countries that are have taken aggressive actions to reduce the spread of COVID-19. 

Technical Indicators

Overall, the bias in prices is: Downwards.

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

The projected upper bound is: 195.72.

The projected lower bound is: 152.47.

The projected closing price is: 174.10.

Candlesticks

A white body occurred (because prices closed higher 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 25 white candles and 25 black 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).

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 92.8975. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 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 53.84. 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 18 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 114.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 12 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -0.400 at 174.790. Volume was 2% below average (neutral) and Bollinger Bands were 17% wider than normal.

Open     High      Low     Close     Volume___
173.670 175.000 169.450 174.790 19,355,356
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 166.34 182.43 192.06
Volatility: 64 82 48
Volume: 23,698,802 23,786,082 16,571,422

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 9.0% below its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 1 periods.

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