Facebook, Inc. (NASDAQ:FB) remains in hot water over recent scandals
Shares of Facebook, Inc. (NASDAQ:FB) were sliding today on a continuing string of bad press and amid a broader sell-off in the Nasdaq, which lost 3% on the day. Facebook closed today’s session down 5.7%, touching a 52-week-low.
Concern about Facebook’s role in society at large, which had been touched off earlier by Russian hacking in the 2016 election and the Cambridge Analytica scandal, among other issues, arose again when an investigative report from The New York Times came out last Thursday, detailing Facebook’s hiring of an opposition firm that sought to tie anti-Facebook activists to liberal financier George Soros, while portraying other critics as anti-Semitic, among other issues that show a company in disarray and acting with questionable ethics.
t’s become clear that at the very least, Facebook will need to significantly ramp up spending on content-monitoring and other defensive needs to protect the company against potential hacking and from being hijacked as a platform for hate speech, like what happened with the genocide of the Rohingya Muslims in Myanmar. The company has already told investors that much, projecting a narrower operating margin over the coming quarters; however, the greater risk for Facebook is that users and advertisers become so disgusted with the platform that they simply log off. It’s unclear at the moment how serious that threat is, since news items like the ones above are often sensationalized by media elites but ignored by the masses. Over the past few quarters, user growth on Facebook in North America and Europe has essentially plateaued.
A measurable user exodus would likely send the stock plunging as it would signal that Facebook’s brand has been irrevocably damaged, and those users aren’t coming back. On the other hand, if Facebook can survive the current challenges, the stock looks exceptionally cheap at a P/E of just 19. After all, according to conventional financial measurements like revenue growth and profitability, this still looks like a blockbuster business.
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 160.21.
The projected upper bound is: 140.47.
The projected lower bound is: 121.32.
The projected closing price is: 130.90.
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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend.
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 18.5402. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 2 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 28.03. 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 buy 50 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 -188.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 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 5 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -7.980 at 131.550. Volume was 60% above average (neutral) and Bollinger Bands were 23% narrower than normal.
Open High Low Close Volume___
137.610 137.750 131.210 131.550 44,362,728
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 143.72 154.59 174.54
Volatility: 42 40 47
Volume: 24,770,296 25,797,774 27,885,476
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 down today (bearish) 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 24.6% below 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 41 periods. Our momentum oscillator is currently indicating that FB.O is currently in an oversold condition.
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