Facebook, Inc. (NASDAQ:FB) is evidently not bulletproof
Facebook share price fell more than 20% in after-hours trading.
CFO David Wehner said “putting privacy first” will likely “have some impact on revenue growth.”
For the first time in 11 quarters, Facebook missed analysts’ revenue expectations.
Monthly user growth is continuing to slow.
Instagram and WhatsApp are still solid components of the company.
The big drop in Facebook stock last week made history as the company lost over $100 billion dollars in market capitalization in a single day. Never before had a stock lost that much in one day, but it happened.
Investors are wondering how that could happen and what is going to happen next.
After a stock drops like this with such a surprise it traps everyone who has bought into it at higher prices over the past few months.
That creates simple price resistance on the technical analysis stock charts that is now going to hold the stock down.
So the best case scenario is that the stock goes sideways for months, probably for the rest of the year, to build a base to launch a new really off of.
The problem is the stock has a super high valuation trading with a P/E of 24 so it’s more likely to pause here for a few weeks and then continue lower and lower.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 193.74.
The projected lower bound is: 155.71.
The projected closing price is: 174.72.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 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 13.9517. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 1 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 29.47. This is where it usually bottoms. 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 1 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 -229.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 1 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 1 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -1.370 at 174.890. Volume was 104% above average (neutral) and Bollinger Bands were 80% wider than normal.
Open High Low Close Volume___
179.870 179.930 173.000 174.890 60,073,748
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 203.88 196.28 181.56
Volatility: 124 62 44
Volume: 40,902,556 21,789,870 24,970,452
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 3.7% below 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 0 periods. Our momentum oscillator is currently indicating that FB.O is currently in an oversold condition.