Facebook, Inc. (NASDAQ:FB) Next earnings season could be critical

Facebook, Inc. (NASDAQ:FB) Next earnings season could be critical

Facebook, Inc. (NASDAQ:FB) Next earnings season could be critical

There is undeniable power in social media. But does that mean there’s profit for shareholders —- particularly new money?

The bull case for both Facebook FB, +1.24% and Twitter TWTR, -0.34% boils down to their scale and ability to connect in meaningful ways. After all, Facebook boasts a staggering 2.2 billion monthly users worldwide on its platforms — roughly 30% of the entire planet’s population. Using Twitter, President Trump has disrupted politics by pushing out his messaging directly. Tech icon Elon Musk instantly added 10% to the value of Tesla TSLA, +2.85% in August after a tweet about a half-baked plan to take the company private… and faces a Justice Department investigation as a result.

Increasingly, the potential for stock-market outperformance is a hard narrative to swallow in both cases.

Sure, Facebook has seemingly rallied nonstop for five years; shares are up 220% since September 2013 to lap the S&P 500 more than three times over. But the stock is in the red year-to-date.

Twitter’s narrative is pretty much the opposite, with strong returns of about 70% in the last 12 months. But its share price remains far below its first printed price of about $45 share after its 2013 IPO and only modestly above its actual offer price of $26.

Perhaps unsurprisingly, Wall Street analysts have started to take a more cautious view of both companies.

On Facebook, most Wall Street analysts held to a “buy” rating even after the disappointing earnings. But their moves on price targets were telling. Stifel slashed its 12-month target on Facebook from $242 to $202, and JPMorgan Chase made a similar reduction from $242 to $205 — both cuts of more than 15%.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 175.53.

The projected upper bound is: 185.00.

The projected lower bound is: 147.18.

The projected closing price is: 166.09.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

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 Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 73.4276. This is not an overbought or oversold reading. The last signal was a buy 6 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 46.92. 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 12 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 150.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 11 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 2.040 at 166.950. Volume was 5% above average (neutral) and Bollinger Bands were 25% narrower than normal.

Open High Low Close Volume___
164.300 169.300 164.210 166.950 25,252,232

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period 50-period 200-period
Close: 163.38 176.75 180.41
Volatility: 23 63 45
Volume: 24,735,234 29,523,760 26,902,458

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.

Summary

FACEBOOK INC A is currently 7.5% below its 200-period moving average and is in an downward trend. Volatility is Our volume indicators reflect moderate flows of volume out of FB.O (mildly bearish). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 3 periods.

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