Is It Too Late To Buy Facebook, Inc. (NASDAQ:FB)
Facebook stock has completely recovered from the Cambridge Analytica scandal, and it’s currently trading at fresh historical highs. In this context, investors may be wondering if it’s too late to buy.
Analyzing stocks based on objective and quantified data is far better than making investing decisions based on subjective opinions and speculation.
Statistical data shows that factors such as financial quality, valuation, momentum, and relative strength are powerful return drivers for stocks.
The following article takes a look at Facebook stock, based on these quantitative factors.
According to the numbers, Facebook stock is still well-positioned for attractive returns going forward.
Facebook (FB) stock has completely recovered from the Cambridge Analytica scandal. Shares of the leading social network are trading near historical highs as of the time of this writing, gaining more than 35% in the past year.
In this context, it makes sense for investors to be wondering if they have already missed their chance to buy Facebook stock at a reasonable price or if the company still offers attractive potential for returns on a forward-looking basis.
Statistical research has proven that factors such as financial quality, valuation, fundamental momentum, and relative strength can be powerful and effective return drivers for stocks. With this in mind, the following article is taking a look at Facebook from a quantitative perspective in order to evaluate the stock and what it has to offer to investors in terms of risk and return.
Exceptional Financial Quality
Facebook has produced outstanding financial performance over the long term. The company has increased revenue at an average compounded annual growth rate of 51.5% annually over the past five years. This kind of growth is clearly exceptional, as very few companies can grow that rapidly from such a big revenue base.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 211.35.
The projected lower bound is: 196.93.
The projected closing price is: 204.14.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 32 white candles and 18 black candles for a net of 14 white candles.
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 90.2560. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 10 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 62.14. 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 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 107.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 3 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 0 period(s) ago.
Rex Takasugi – TD Profile
FACEBOOK INC A closed down -1.200 at 203.540. Volume was 55% below average (consolidating) and Bollinger Bands were 36% narrower than normal.
Open High Low Close Volume___
204.500 204.910 202.260 203.540 13,190,067
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 198.54 189.94 179.29
Volatility: 32 24 34
Volume: 16,883,090 18,147,508 23,779,900
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 is currently 13.5% above its 200-period moving average and is in an upward 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 bullish on FB.O and have had this outlook for the last 2 periods.