Facebook, Inc. (NASDAQ:FB) improved underlying fundamentals
Even though shares of Facebook have fallen sharply on headlines about regulatory scrutiny, Moffett Nathanson said Tuesday the stock’s valuation is attractive given the health of its core business and potential for growth.
“We believe improving underlying fundamentals offsets the risk of greater regulatory scrutiny,” Moffett Nathanson’s Michael Nathanson said in a note to clients.
Recent talk of the breakup of big technology companies has worried investors. Last week, Facebook shares plummeted when The Wall Street Journal reported that the Federal Trade Commission is investigating the tech giant’s practices on digital competition. Facebook was also brought into the spotlight around a House Judiciary Committee investigation regarding similar issues.
Nathanson said antitrust actions on Facebook seem unlikely, considering “the focus of U.S. courts on proof of consumer harm.” “We believe holding platforms liable for user content is the larger threat, but there have not been meaningful developments around this issue,” he said.
Although unlikely, Nathanson said, regulatory scrutiny is already priced into Facebook’s stock, but future growth opportunities are “not yet captured” in Facebook’s share price.
Commerce and messaging are turning into “growth drivers long-term,” he said. Organic growth declaration has moderated because of better-than-expected monetization of Facebook Stories, and margins are “set to stabilize after two years of heavy investment,” he said.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 188.82.
The projected lower bound is: 167.83.
The projected closing price is: 178.33.
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 24 black candles for a net of 1 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.
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 85.7879. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 49.45. 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 21. This is not a topping or bottoming area. The last signal was a buy 2 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 sell 24 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 3.280 at 178.100. Volume was 11% below average (neutral) and Bollinger Bands were 19% wider than normal.
Open High Low Close Volume___
178.480 179.980 176.790 178.100 15,266,644
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 173.71 181.59 161.31
Volatility: 57 37 42
Volume: 21,786,620 17,005,330 21,977,868
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 10.4% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 16 periods.
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