Facebook, Inc. (NASDAQ:FB) Stock Stands to Benefit as the World Embraces Its Apps

Facebook, Inc. (NASDAQ:FB) Stock Stands to Benefit as the World Embraces Its Apps

Facebook, Inc. (NASDAQ:FB) Stock Stands to Benefit as the World Embraces Its Apps

Off the top of my head, it’s difficult to come up with a name shrouded in so much controversy over a short period of time like Facebook (NASDAQ:FB). Starting from the Cambridge Analytica scandal in the spring of 2018, the social media giant has faced privacy violation issues along with accusations of aiding housing discrimination. It’s enough to scare many folks out of Facebook stock.

And yet, when looking at the charts, the company is one of the more resilient names in the markets. After suffering a badly disappointing year in 2018 — when it appeared that even the big man upstairs hated Facebook — the FB stock price rebounded convincingly last year, gaining 59%.

To put this into perspective, rival Twitter (NYSE:TWTR) only moved up 13% in 2019. Furthermore, the much-anticipated initial public offering of Pinterest (NYSE:PINS) ended last year with a whimper. It finished just underneath its IPO price of $19.

Comparatively, the main exception is Snap (NYSE:SNAP), which destroyed everyone in social media, skyrocketing 182%. However, it’s fair to point out that SNAP benefited from the law of small numbers.

Nevertheless, Facebook stock put up impressive numbers despite dominating the space in terms of active users. Now, the question remains if there’s more left in the tank for a credible run in 2020?

As a contrarian investor, I understand the hesitation regarding buying big blue chips that already scored strong returns. At best, the thinking goes, the good news is already priced in. At worst, shares could tumble. With the FB stock price no stranger to volatility, it’s a risky proposition.

Still, I believe the fundamental case for Facebook stock remains viable and here’s why.

Balanced Geographic Distribution a Plus for Facebook Stock

In my many stories covering FB stock, one of the consistent bullish arguments I’ve presented is practicality. Unlike other social media platforms that have a specific intent, Facebook is comparatively open source.

Typically, people use it as a communication channel with friends and family, especially if they live further away. But as you know, the company has evolved into myriad technological avenues. Combined with its massive base, users have other options available. For instance, it’s not uncommon to network professionally on the platform. As well, you can easily advertise your business or your non-profit venture.

On a similar note, Facebook is demographically agnostic. From young to old, the platform offers something for everyone. And this universal utility has helped drive FB stock in the past.

Technical Indicators

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 197.57.

The projected upper bound is: 222.14.

The projected lower bound is: 209.39.

The projected closing price is: 215.77.

Candlesticks

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 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 90.9724. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 9 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 70.88. This is where it usually tops. 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 sell 123 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 183.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 11 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 2.160 at 215.220. Volume was 0% above average (neutral) and Bollinger Bands were 48% wider than normal.

Open     High      Low     Close     Volume___
213.000 216.240 212.612 215.220 13,492,703
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 209.00 199.47 188.98
Volatility: 22 20 30
Volume: 11,416,591 14,080,469 14,976,529

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 13.9% above its 200-period moving average and is in an upward trend. Volatility is 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 57 periods. Our momentum oscillator is currently indicating that FB.O is currently in an overbought condition.

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