The combination of the growth of Facebook, Inc. (NASDAQ:FB) user base and its reasonable valuation could enable FB stock to reach record highs next year

The combination of the growth of Facebook, Inc. (NASDAQ:FB) user base and its reasonable valuation could enable FB stock to reach record highs next year

The combination of the growth of Facebook, Inc. (NASDAQ:FB) user base and its reasonable valuation could enable FB stock to reach record highs next year

With stock markets close to their  all-time highs, the recovery of Facebook (NASDAQ:FB) stock seems to have been almost overlooked.

Trading close to $190, and just off recent highs. FB stock now has risen over 50% from its December lows, increasing its market capitalization by about $200 billion in the process.

In fact, FB is only about 15% away from retaking its all-time highs. Those were reached last August, just before the market value of Facebook stock plunged by the largest amount in history. In the context of that plunge – and the selling pressure that continued into December – the rebound of FB stock seems nothing short of miraculous.

The question now is whether the rally can keep going. That ,in turn, seems to require understanding why FB stock has soared 50%. At the moment, it looks like investors are betting on Facebook stock for reasons that go beyond the Facebook platform. As a result,  the big gains of FB stock might not end anytime soon.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 194.15.

The projected lower bound is: 177.02.

The projected closing price is: 185.59.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 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 50.9625. This is not an overbought or oversold reading. The last signal was a sell 19 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 51.42. 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 11 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 -36. This is not a topping or bottoming area. The last signal was a buy 5 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 11 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed up 0.500 at 185.320. Volume was 49% below average (consolidating)(neutral) and Bollinger Bands were 24% narrower than normal.

Open High Low Close Volume___
184.730 186.740 183.610 185.320 9,213,801

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

Moving Averages: 10-period 50-period 200-period
Close: 185.07 179.12 161.52
Volatility: 31 30 41
Volume: 12,726,100 16,838,212 22,358,106

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 14.7% above its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 3 periods.

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