Facebook, Inc. (NASDAQ:FB) target of US antitrust regulators

Facebook, Inc. (NASDAQ:FB) target of US antitrust regulators

Facebook, Inc. (NASDAQ:FB) target of US antitrust regulators

Bigger is better, right? Well, not always. For Facebook (FB), Amazon (AMZN) and Google (GOOG), being large and dominant is actually providing for major headache.

The three tech giants are targets of US antitrust regulators, as it is being reported that the FCC and DOJ are looking into how to investigate them. Making matters worse, Democratic presidential nominees continue to campaign on an anti-Big Tech platform, including breaking up the largest and most powerful companies.

However, Baird’s top analyst Colin Sebastian says it is unlikely that Facebook, Amazon or Google will actually be broken apart, as he maintains his Outperform rating on each stock.

As always, we like to give credit where credit is due. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Colin Sebastian has a yearly average return of 24% and a 66% success rate. Sebastian is ranked #32 out of 5,168 analysts.

Overall, Sebastian views the “risks of large-cap tech company breakups as relatively low.” However, he believes there is a “moderate” chance that there is any sort of “anti-trust action short of breakup,” and sees a “relatively high” chance of increased privacy regulation.

A primary point of “refuge” for Facebook and Google is that it is relatively widely accepted that neither company is “unfriendly to consumers.” In fact, Sebastian says “the growth of Facebook and Instagram (and to a much lesser extent Amazon) created more competition for Google in recent years,” which he believes “dilute[s] arguments that the ‘duopoly’ is unfriendly to consumers.” Furthermore, each service is offered for free, which further makes it challenging to argue that it is harmful to the consumer.

Though Sebastian does not expect much harm to be done to either of the three companies, he does believe “the inevitable involvement of the judicial branch will include reviews of prior FTC and DOJ actions,” and does expect investigation. The analyst believes “investigations could create distractions and muddy medium-term strategic direction,” while government actions “could cast a shadow over innovation and risk-taking.”

While Facebook and Google are the most probable targets for investigations, Sebastian believes Amazon “could outperform other FANGs under the specter of government intervention,” though the analyst says, “positive revenue trends for Facebook could spark a rebound after investors digest the current news-flow.”

Investigations aside, Facebook, Amazon and Google stocks are in good shape. According to TipRanks analysis, there is a Strong Buy consensus rating on each company, with average price targets near or over 30%.

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

The projected upper bound is: 178.57.

The projected lower bound is: 158.12.

The projected closing price is: 168.34.

Candlesticks

A white body occurred (because prices closed higher 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.

A doji star occurred (where a doji gaps above or below the previous candle). This often signals a reversal with confirmation occurring on the next bar.

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 32.5159. This is not an overbought or oversold reading. The last signal was a buy 1 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 34.74. 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 2 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 -102.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 8 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 21 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 0.160 at 168.330. Volume was 32% below average (neutral) and Bollinger Bands were 26% wider than normal.

Open High Low Close Volume___
168.300 169.700 167.230 168.330 12,250,109

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

Moving Averages: 10-period 50-period 200-period
Close: 175.71 181.03 161.27
Volatility: 53 36 42
Volume: 20,713,788 16,757,666 22,032,082

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 4.4% 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 moderate flows of volume out of FB.O (mildly bearish). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 13 periods.

The following two tabs change content below.
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

You must be logged in to post comments :  
CONNECT WITH