Facebook, Inc. (NASDAQ:FB) soared in after-hours trading despite unresolved privacy business with the FTC
The litany of challenging news does not appear to have harmed Facebook’s stock. While it has been languishing, FB has risen more than 50% off its December lows. FB has tripled over the past five years, and the company carries a $474 billion valuation, net of cash. Facebook routinely generates more than $15 billion in annual free cash flow. That seems likely to continue until the other shoes drop.
Facebook’s stock ran up 7.5% in after-hours trading to $196 after Q1 earnings painted a seemingly rosy growth picture. Revenue exploded by $3.1 billion to $15.08 billion, which exceeded estimates. Facebook CEO Mark Zuckerberg, however, revealed that the FTC’s investigation into the company for privacy problems will be painful on the expense line, saying:
“In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices, which accrual is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet. We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion.”
The FTC is probing how Facebook shared data with outside vendors, and the agency is considering the highest fine in history against the company. It’s about time. Facebook has been notoriously lax in protecting user privacy.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 170.32.
The projected upper bound is: 189.49.
The projected lower bound is: 176.34.
The projected closing price is: 182.92.
A black body occurred (because prices closed lower than they opened).
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 25 white candles and 24 black candles for a net of 1 white candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with FACEBOOK INC A). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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 83.4404. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 5 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 68.97. This is not a topping or bottoming area. However, the RSI just crossed below 70 from a topping formation. This is a bearish sign. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 0 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 168.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 15 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -1.200 at 182.580. Volume was 80% above average (neutral) and Bollinger Bands were 8% narrower than normal.
Open High Low Close Volume___
184.490 185.140 181.650 182.580 37,289,872
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 179.78 169.79 162.30
Volatility: 14 25 49
Volume: 14,641,611 16,473,389 24,077,794
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 12.5% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into FB.O (mildly bullish). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 15 periods.
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