Facebook, Inc. (NASDAQ:FB) stock will bounce back from this recent sell-off, but things may get worse before they get better

Facebook, Inc. (NASDAQ:FB) stock will bounce back from this recent sell-off, but things may get worse before they get better

Facebook, Inc. (NASDAQ:FB) stock will bounce back from this recent sell-off, but things may get worse before they get better

Shares of global internet giant Facebook (NASDAQ:FB) are tumbling into early August as broader financial markets are being pressured by escalating trade war and interest rate headwinds. Specifically, all the market has cared about in 2019 is the Fed and the U.S.-China trade war.

Yesterday’s blood bath turned the battle up to 11, and from the look of things this morning, world markets are extending the big losses seen in the wake of Washington calling China a currency manipulator.

Net net, the S&P 500 index has dropped more than 7% off all-time highs in a hurry. Facebook stock hasn’t been spared in the carnage. It’s down more than almost 9% from its late July highs.

Facebook stock dropping alongside the broader market makes sense. Facebook has exposure to both interest rate and trade war headwinds. Plus, the company has its own set of issues which aren’t negligible. As such, so long as these headwinds remain and so long as broader investor sentiment remains depressed, FB stock will remain in sell-off.

Facebook stock is a good buy on this dip. Financial market optics and FB stock optics will improve dramatically into the end of the year, and as they do, they will create runway for the stock to run north of $200.

But, before things get better here, they will probably get worse. As such, buying the dip in Facebook stock here and now requires patience and caution.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 195.00.

The projected lower bound is: 174.16.

The projected closing price is: 184.58.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

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 16.8849. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 14 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 36.01. 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 sell 16 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 -155.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a sell 14 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 sell 12 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 2.780 at 184.510. Volume was 6% above average (neutral) and Bollinger Bands were 11% wider than normal.

Open     High      Low     Close     Volume___
183.690 185.789 183.090 184.510 18,035,686
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 194.03 189.83 167.16
Volatility: 30 37 42
Volume: 21,408,062 18,062,724 20,573,418

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 10.4% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 4 periods.

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