Facebook, Inc. (NASDAQ:FB) Further to Fall

Facebook, Inc. (NASDAQ:FB) Further to Fall

Facebook, Inc. (NASDAQ:FB) Further to Fall

It’s important to take a step back when considering Facebook (NASDAQ:FB) stock. It’s true that Facebook stock saw the biggest one-day decline in market value in history last month; a $119 billion drop is a lot worse than Intel (NASDAQ:INTC) losing $90 billion during the dot-com bust.

From here, it might seem as if Facebook is in a world of trouble after the post-earnings headlines. The news really isn’t that bad, however.

Facebook stock is only down about 1.5% so far this year; it’s up 4% over the past twelve months. Guidance given on the Q2 conference call suggests profit growth is going to be slower than expected, but it’s still positive.

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 185.56.

The projected upper bound is: 191.65.

The projected lower bound is: 152.84.

The projected closing price is: 172.24.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 16.0076. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 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 34.46. 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 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 -110.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 14 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 2 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 0.120 at 172.620. Volume was 19% below average (neutral) and Bollinger Bands were 40% wider than normal.

Open High Low Close Volume___
172.810 174.170 171.390 172.620 19,578,514

Technical Outlook
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 178.28 192.75 181.78
Volatility: 19 63 44
Volume: 23,032,468 26,464,292 25,985,524

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 5.0% below its 200-period moving average and is in an downward 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 bearish on FB.O and have had this outlook for the last 17 periods.

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