Facebook, Inc. (NASDAQ:FB) new all-time highs look like just the beginning
Facebook, Inc. (NASDAQ:FB) has quieted its doubters — at least for now. Facebook stock reached another all-time closing high on Monday, finishing just south of $205. The stock now has gained 15% so far this year — an improvement that seemed unlikely just a few months ago.
After all, in March, Facebook stock briefly touched $149. The Cambridge Analytica scandal angered users and spooked the markets.
The Valuation and the Risks
It’s important to remember that FB isn’t a high-flying tech stock. In fact, it remains rather cheap. Backing out cash on the balance sheet, the stock trades for just under 20 times 2019 consensus earnings-per-share estimates.
Facebook is priced as if growth is going to end relatively quickly. Right now, that seems highly unlikely.
The Growth Opportunities
Even assuming growth slows, Facebook looks too cheap. But there’s another factor to consider. What growth there is now is coming pretty much just from the Facebook platform. Instagram and WhatsApp haven’t really been monetized yet.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 210.33.
The projected lower bound is: 195.97.
The projected closing price is: 203.15.
A white body occurred (because prices closed higher 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 33 white candles and 17 black candles for a net of 16 white candles.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
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 82.9666. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 11 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 60.28. 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 sell 11 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 87. This is not a topping or bottoming area. The last signal was a sell 0 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 1 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -1.000 at 202.540. Volume was 100% below average (consolidating) and Bollinger Bands were 38% narrower than normal.
Open High Low Close Volume___
202.220 204.500 201.750 202.540 41
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 198.90 190.55 179.45
Volatility: 31 24 34
Volume: 15,093,336 17,732,498 23,719,414
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 12.9% above its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 3 periods.