Facebook, Inc. (NASDAQ:FB) The Real Crisis for Facebook Stock

Facebook, Inc. (NASDAQ:FB) The Real Crisis for Facebook Stock

Facebook, Inc. (NASDAQ:FB) The Real Crisis for Facebook Stock

Facebook now has nine data centers and has announced a tenth. The locations of the data centers indicate that FB is dependent on U.S. and European traffic. Those areas just happen to be the places where the calls for regulating the service are the strongest.

The extent to which a data center is used is less important than the amount of money spent on its construction and maintenance. Facebook is expected to spend $14 billion on its data centers this year, almost one-quarter of its total revenue. Meanwhile, Facebook stock tanked after FB reported its second-quarter results because its revenue growth slowed.

More important, user growth stopped in North America and was negative in Europe. The company’s data centers are all located on those two continents. Its capital budget may no longer be aligned with its growth, with more than two-thirds of its daily active users now in Asia, Africa, or Latin America.

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 175.92.

The projected upper bound is: 183.50.

The projected lower bound is: 145.64.

The projected closing price is: 164.57.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 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 piercing line occurred (which indicates that prices moved down on the previous bar, opened even lower, but then closed significantly higher). This implies strength as the momentum appears to be shifting from the bears to the bulls. Note that the higher the close of the white candle (relative to the black candle), the more bullish the Piercing Line pattern.

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 72.9399. This is not an overbought or oversold reading. The last signal was a buy 4 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 43.74. 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 10 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 26. This is not a topping or bottoming area. The last signal was a buy 9 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 3 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 2.480 at 165.410. Volume was 19% below average (neutral) and Bollinger Bands were 12% narrower than normal.

Open High Low Close Volume___
161.030 165.700 160.880 165.410 19,222,776

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

Moving Averages: 10-period 50-period 200-period
Close: 162.99 178.46 180.55
Volatility: 27 63 45
Volume: 23,901,250 28,994,820 26,839,524

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 8.4% below its 200-period moving average and is in an downward trend. Volatility is 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 1 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.

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