Time to 'friend' Facebook?
Candlestick pattern: January 2016 saw a bullish engulfing formation following a series of Doji’s.
Most recent support: The stock saw heavy rejection at the $106-108 level (April & June) indicating support in this area.
Stochastic oscillators: The weekly MACD turned positive in February of this year with a cross to the upside and is currently trading near the upper end of its most recent range (albeit weaker of late).
Moving averages: The stock is trading above both its 200 & 50 day simple moving average
Anchor industry and company drivers:
Latest Numbers: Q1 2016 Results (published April 27)
Recent results: FB posted a positive set of Q1 figures with revenue (chart above) coming in at $5,382 ($3,543 for the same year ago period) and operating GAAP margins of 37% (versus 26% for the equivalent 2015 period).
Standalone valuation: FB has an Altman Z-Score of 42.34 (a read of >3 generally indicates solid underlying company financials).
Competitor/industry valuation: Trades at a discount to its peers on a number of forward metrics.
Stock sentiment: Currently positive on the name
FB’s is due to release Q2 numbers in late July (date to be agreed).
Buy at current levels (114.25).
For breakout buyers (B), we would highlight $115.50 (mid June 2016 highs).
For pullback buyers (P), we would highlight $110 (late April 2016) with a lower level at $100.
Stop: as low risk market participants we would recommend a hard stop loss at $98.
Target: $125 and $135.
Time horizon: three to six months.
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— Edited by Michael McKenna