Facebook, Inc. (NASDAQ:FB) has a weakening price momentum

Facebook, Inc. (NASDAQ:FB) has a weakening price momentum

Facebook, Inc. (NASDAQ:FB) has a weakening price momentum

Facebook closed down 1.07 per cent, another poor performance for a stock that has seen its share of troubles this year. First came the Cambridge Analytica data scandal which only served to heighten concerns from governments worldwide over the social and political influence available through social media channels. Worse news for FB came in July as investors reacted strongly to its quarterly earnings report which told of a slowdown in growth for the company.

Its valuation is okay —we’d put it in the top 40 per cent of all US stocks.  Relative to other tech stocks, it’s actually a reasonably priced company at 22x earnings, especially being part of the FAANG bucket that has become quite overvalued.

Facebook has a weakening price momentum, a valuation that’s still not cheap enough versus other stocks in the market and it has become volatile.  So now for us, it’s neutral. If it keeps declining like this, though, it may end being a short for us.

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 176.75.

The projected upper bound is: 178.62.

The projected lower bound is: 140.84.

The projected closing price is: 159.73.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 22 white candles and 28 black candles for a net of 6 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 18.7324. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 4 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 30.88. 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 5 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 -82. This is not a topping or bottoming area. The last signal was a buy 4 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 7 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -1.740 at 160.580. Volume was 10% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open High Low Close Volume___
161.920 162.060 159.770 160.580 21,005,320

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

Moving Averages: 10-period 50-period 200-period
Close: 164.03 182.60 180.83
Volatility: 28 62 45
Volume: 25,981,348 27,894,364 26,760,236

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 11.2% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of FB.O (mildly bearish). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 35 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH