Facebook, Inc. (NASDAQ:FB) stock looks like a strong buy
What a difference a month makes. Not that long ago, Facebook (NASDAQ:FB) was riding high again. After the Cambridge Analytica scandal knocked Facebook stock down from $190 to $150, the shares quickly bounced back. Following reassuring testimony from Mark Zuckerburg in front of Congress and a blowout earnings report, Facebook stock quickly shot up to new, all-time highs.
But recently, following a rather downbeat update on the company’s guidance, FB stock plummeted from $210 to $175 in a single trading session. It has, for the most part, continued heading lower since then and is now trading around $165.
Facebook stock is now selling for about 22 times its trailing earnings and 19 times its forward earnings. And as I noted above, its earnings are expected to keep growing at a nice clip, despite its scandal-induced headwinds. On the other hand, Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) has price-earnings ratios of 31 times its trailing earnings and 25 times its forward earnings. Among the tech darlings with even higher price-earnings ratios are AMD (NASDAQ:AMD), Netflix (NASDAQ:NFLX), and Amazon.com (NASDAQ:AMZN).
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 176.01.
The projected upper bound is: 184.28.
The projected lower bound is: 146.30.
The projected closing price is: 165.29.
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 24 white candles and 26 black candles for a net of 2 black candles.
A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 3 rising windows in the last 50 candles–this makes the current rising window even more bullish.
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 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 71.8836. This is not an overbought or oversold reading. 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 43.21. 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 8 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 18. This is not a topping or bottoming area. The last signal was a buy 7 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 1 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed up 2.960 at 166.020. Volume was 19% below average (neutral) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume___
164.500 166.450 164.472 166.020 18,936,038
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 162.88 180.17 180.65
Volatility: 23 63 45
Volume: 21,829,322 28,229,632 26,715,640
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 up today (bullish) 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 8.1% below its 200-period moving average and is in an upward trend. Volatility is Our volume indicators reflect moderate flows of volume out of FB.O (mildly bearish). Our trend forecasting oscillators are currently bullish on FB.O and have had this outlook for the last 1 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.