Facebook, Inc. (NASDAQ:FB) Hits Record With Wall Street Looking Past Regulatory Risk
Facebook Inc. shares hit an intraday record on Monday, eclipsing a level that was last reached in mid-2018 as growing optimism over its 2020 prospects were seen as overshadowing risk related to regulation.
Wall Street has been growing more positive on the social-media company for months, with most analysts citing a tailwind from growth in the digital advertising market, as well as the company’s ability to further monetize its massive user base.
Earlier on Monday, Evercore ISI raised its price target on the stock to $280 from $235, touting the company’s moves into e-commerce via its Instagram app. Consensus forecasts “under appreciate the revenue and narrative benefits associated with the blurring lines between advertising and e-commerce on Instagram,” wrote analyst Benjamin Black, who named the company one of his best ideas for 2020.
Mizuho Securities also named Facebook a top Internet pick for 2020 on Monday, expecting the stock to outperform this year “given its significant portfolio of assets which are yet to be fully monetized.”
The stock rose as much as 1.7%, having climbed more than 25% off a recent low in October. Facebook jumped more than 55% over the course of last year, the stock’s best annual performance since 2013. The return to record levels means that Facebook has completely recovered from a historic sell-off from July 2018, when disappointing quarterly results sparked a one-day drop of about 19%.
The advance comes as Wall Street increasingly looks past what is seen as a “fraught” regulatory environment, one focused on a variety of issues, including user privacy, ad policies and competition. Mizuho, in its Monday research report, wrote that regulatory concerns were “overstated” and already priced into the stock price.
Wall Street is broadly positive on Facebook. According to data compiled by Bloomberg, 49 firms recommend buying Facebook, while five have a hold rating on the shares. Just three advocate selling the stock. The average price target is around $238, suggesting upside of more than 7% from current levels.
Facebook’s fourth-quarter results will be released on Jan. 29.
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 200.67.
The projected upper bound is: 229.14.
The projected lower bound is: 216.03.
The projected closing price is: 222.58.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
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 94.4695. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 12 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 76.97. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 126 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 154.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 buy 14 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 3.850 at 221.910. Volume was 7% above average (neutral) and Bollinger Bands were 82% wider than normal.
Open High Low Close Volume___
219.596 221.970 219.210 221.910 14,494,517
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 212.73 201.29 189.78
Volatility: 23 21 30
Volume: 12,776,527 13,747,153 14,989,300
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 16.9% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect very strong flows of volume into FB.O (bullish). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 60 periods. Our momentum oscillator is currently indicating that FB.O is currently in an overbought condition.
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