Facebook, Inc. (NASDAQ:FB) delivers a blowout quarter

Facebook, Inc. (NASDAQ:FB) delivers a blowout quarter

Facebook, Inc. (NASDAQ:FB) delivers a blowout quarter

Facebook has had its share of tough issues to manage over the past year.

The company continued to deal with the fallout from its involvement in a data breach scandal related to the 2016 U.S. presidential election that affected millions of Facebook accounts. The tech giant had to pay a hefty $5 billion government fine this year and update its security settings as part of efforts to settle that matter. Then Facebook was listed as one of four large tech companies at the center of a government probe into anti-competitive and monopolistic practices related to how it manages and controls online traffic and communication. Then the social media platform launched the controversial Libra project, an initiative to create a cryptocurrency to facilitate financial transactions worldwide — particularly for those with no access to traditional banks. The endeavor raised a plethora of security and regulatory issues, and Facebook’s involvement in the project has been widely criticized.

All of these issues would be more than enough to have a profound (and negative) financial impact on most companies, but Facebook seems to be holding its own — at least if its latest financial results, released on Oct. 30, are any indication.

Facebook delivers a blowout quarter

It is difficult to find something to complain about in Facebook’s financial results. The company showed growth and progress across the board. Year over year, Facebook’s daily and monthly active users grew by 9% and 8%, respectively. On the back of increased engagement on its platform, Facebook’s advertising revenues increased by 28% on a yearly basis, while its payment and fees segment saw a 43% jump in revenues compared to last year’s third quarter; this added up to a top-line increase of 29% year over year.

Further, the company’s net income grew by 19% year over year, while its diluted earnings per share (EPS) increased by 20% compared to Q3 2018. One might have expected Facebook’s engagement to go down — at least slightly — due to its reputation taking a hit. But the company seems to be in a unique position: Facebook has amassed more than 2 billion active accounts, and few alternative social media platforms boast a network that even comes close to matching that of the tech giant. Thus, it makes little sense for its users to jump ship to a competitor, nor quit the platform entirely.

Facebook has a bright future

Facebook offers investors several perks: Steady and growing revenues and earnings, several avenues to expand its reach worldwide, and what is looking like an apparent immunity to almost all headwinds coming its way.

One thing that could stop Facebook: Some government regulators have flirted with (or even fully embraced) the idea of breaking up the tech giant. But indications so far are that this course of action is extremely unlikely. As things stand, Facebook still looks like an attractive investment.

Technical Indicators

Overall, the bias in prices is: Upwards.

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

By the way, prices are vulnerable to a correction towards 187.18.

The projected upper bound is: 200.03.

The projected lower bound is: 183.48.

The projected closing price is: 191.76.

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 25 white candles and 25 black 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 59.8356. This is not an overbought or oversold reading. The last signal was a sell 13 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 56.56. 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 81 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 66. This is not a topping or bottoming area. The last signal was a sell 0 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 20 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -2.770 at 191.550. Volume was 23% below average (neutral) and Bollinger Bands were 20% narrower than normal.

Open     High      Low     Close     Volume___
194.030 194.370 191.350 191.550 10,973,019
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 190.71 185.65 181.21
Volatility: 17 28 35
Volume: 17,681,856 13,739,452 16,434,708

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 5.7% above its 200-period moving average and is in an upward 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 bullish on FB.O and have had this outlook for the last 15 periods.

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