Facebook, Inc. (NASDAQ:FB) plans for a new cryptocurrency project called Libra

Facebook, Inc. (NASDAQ:FB) plans for a new cryptocurrency project called Libra

Facebook, Inc. (NASDAQ:FB) plans for a new cryptocurrency project called Libra

Facebook FB announced today plans for a new cryptocurrency project called Libra. The much-anticipated news was welcomed by eager Wall Street analysts who are raving about where this new venture can take Facebook in the future. Some analysts have even gone so far as to state that Facebook’s new cryptocurrency initiative can become a worldwide currency. Tally CEO Jason Brown stated “It literally threatens the governments that issue currency, the banks that store it and the actual transmission network,” eagerly expressing the potential he sees in the project. Brown believes that Libra will be met with slow adoptions in its initial 2020 release for everyday expenses, such as paying bills but he thinks it will quickly become the most popular way to get money out of first world countries.

Facebook has also created a corporate organization called the Libra Foundation, which was formed to help the currency gain traction. Facebook itself is a member, as well as Visa V, PayPal PYPL, eBay EBAY, Lyft LYFT, Uber UBER, and many others.

Despite the current craze over Facebook’s newest project, the company’s looming user privacy issues are still a concern. Libra requires users’ trust in Facebook, and if the social media giant wants to ensure their project’s success, then they must figure out a way to earn back their user’s trust.

The unveiling of Libra comes at a time when Facebook is currently facing public and federal scrutiny for their user privacy policies. David Marcus, a Facebook executive, assured the public that consumers don’t need to worry about the social media company gaining access to their financial data. Marcus went on to state that Facebook needs to “make big commitments on privacy” establishing the stance Facebook must take in order to have project Libra take off.

Facebook is currently sitting at a Zacks Rank #2 (Buy) and is being traded at 26X its forward earnings with a PEG ratio of 1.32. Its lower than average PEG ratio indicates that investors would be paying less for the potential growth in Facebook than it would with other stocks in the industry. Furthermore, Facebook currently has a 3.75% earnings yield, further establishing the stock’s solid valuation. According to Zacks Estimates, Facebook has projected sales growth of 23.97% for this fiscal year, but earnings could see a decline year-over-year. In addition, Facebook has been able to maintain its stronghold in the industry this year, outperforming other tech industry giants on a year-to-date basis.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 199.62.

The projected lower bound is: 177.83.

The projected closing price is: 188.73.

Candlesticks

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 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

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 85.0522. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 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 60.87. 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 10 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 156.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 7 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 4 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -0.540 at 188.470. Volume was 118% above average (neutral) and Bollinger Bands were 24% wider than normal.

Open High Low Close Volume___
194.000 194.530 187.280 188.470 37,571,352

Technical Outlook
Short Term: Overbought
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 177.41 182.46 161.48
Volatility: 31 39 42
Volume: 19,291,486 17,493,298 22,120,680

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 16.7% 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 21 periods.

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