Facebook, Inc. (NASDAQ:FB) still shows plenty of strength

Facebook, Inc. (NASDAQ:FB) still shows plenty of strength

Facebook, Inc. (NASDAQ:FB) still shows plenty of strength

Facebook (NASDAQ:FB) and its founder and CEO, Mark Zuckerburg, are posterchildren for the hero-to-zero persona. For years, Zuckerburg was viewed as the man who connected the world through social media. And he created trillions of dollars in value for companies related to the social media space.

But today that same man is viewed as the villain who introduced the world to social media and created the online monster that is Facebook.

I have to say … I never loved Facebook, but I don’t loathe it either. Aside from Twitter, I’m just not a big fan of social media. In fact, I have deleted both my Facebook and Instagram (which is owned by Facebook) accounts.

All that said, I am not ready to press the hypothetical delete button on FB stock just yet. However, I am also not ready to proclaim that the $123.02 low hit in December was the stock’s ultimate bottom.

Whether it was or wasn’t, I strongly believe that Facebook is a good value in the $120-$145 area for long-term investors.

From a valuation standpoint, FB trades with a PEG ratio of 1.09 and a forward P/E ratio of 19.4. Both are close to the lowest levels ever for this company — aside from when it was trading at its December low.

Earnings per share will only show a small increase in 2019 after experiencing high annual growth since the company went public. However, growth should pick back up in 2020 and beyond.

Put it all together and the numbers suggest a stock that is undervalued but could take a couple of years to get back to its full valuation.

Finally, there’s one non-quantitative catalyst that’s worth mentioning. Businesses still rely heavily on Facebook for advertising, and I don’t expect this to change at any point in the coming years. That means the company should continue to see revenue growth of more than 20% for at least the next five years, which will ultimately lead to a higher stock price for FB.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 156.38.

The projected lower bound is: 134.37.

The projected closing price is: 145.37.

Candlesticks

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 28 white candles and 22 black candles for a net of 6 white 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 88.1881. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 12 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 58.85. 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 34 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 106.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 12 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 7 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 1.590 at 145.390. Volume was 22% below average (neutral) and Bollinger Bands were 26% wider than normal.

Open High Low Close Volume___
142.000 146.570 141.270 145.390 20,520,278

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

Moving Averages: 10-period 50-period 200-period
Close: 139.47 139.92 167.60
Volatility: 43 52 49
Volume: 22,260,382 26,700,330 25,992,926

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 13.3% below its 200-period moving average and is in an upward 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 bullish on FB.O and have had this outlook for the last 5 periods.

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