Facebook, Inc. (NASDAQ:FB) new cryptocurrency could make big waves
Facebook, Inc. (FB) shares rose nearly 3% during Monday’s session after analysts expressed optimism about its new cryptocurrency offering – Libra. The company will unveil a white paper on Tuesday related to the new cryptocurrency, which has already reportedly gained widespread support from industry partners and governments, including Visa Inc. (V), Mastercard Incorporated (MA), and PayPal Holdings, Inc. (PYPL). The value of the currency will reportedly be pegged to a basket of global currencies, including the dollar and euro.
SunTrust analyst Youssef Squali believes that Facebook’s new Libra cryptocurrency initiative could help expand the company’s growth prospects over the coming years. With a launch for Libra anticipated in 2020, the analyst cites press reports suggesting that over a dozen large financial institutions have signed on as partners, signaling Facebook’s intent to become a leading online transactional platform. SunTrust maintains its Buy rating and price target of $215 per share on the stock.
Analysts have also begun speculating about the impact on other payment firms. For instance, Craig-Hallum analyst Brad Berning noted that a Facebook cryptocurrency could be a positive for PayPal since it could drive higher adoption of Braintree merchant acceptance and the Facebook marketplace.
From a technical standpoint, the stock broke out from its 50-day moving average at $182.15 to test trendline resistance from last month. The relative strength index (RSI) moved closer to overbought levels with a reading of 59.45, but the moving average convergence divergence (MACD) experienced a bullish crossover. These indicators suggest that the stock could have more room to run over the coming sessions.
Traders should watch for a breakout from trendline resistance to retest highs of around $198.50 made in April. If the stock moves lower from trendline resistance, traders could see a move lower to trendline support at around $175.00 or a retest of prior lows near the 200-day moving average at $160.00. Traders will be keeping a close eye on Facebook’s cryptocurrency move as a key driver of price movement this week.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 200.16.
The projected lower bound is: 178.38.
The projected closing price is: 189.27.
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 26 white candles and 24 black candles for a net of 2 white candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 4 rising windows in the last 50 candles–this makes the current rising window even more bullish.
Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.
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 90.4417. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 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 61.65. 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 9 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 147.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 6 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 3 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 7.680 at 189.010. Volume was 73% above average (neutral) and Bollinger Bands were 17% wider than normal.
Open High Low Close Volume___
185.010 189.500 184.411 189.010 29,459,880
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 175.31 182.20 161.41
Volatility: 30 39 42
Volume: 20,138,776 16,933,754 22,026,216
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 gapped up today (bullish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
FACEBOOK INC A is currently 17.1% above its 200-period moving average and is in an downward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 20 periods.