Facebook, Inc. (FB)

Facebook stock forecast: buy or sell

Facebook stock outlook

  • Facebook inched a 1.19% after marking new all-time highs on Friday
  • The price is currently over the upper Bollinger band, which usually indicates a near-term correction
  • On Thursday broke out above its latest top at $250.15
  • Price is drawing a scaled uptrend since mid-March with higher tops and higher bottoms. This rally marked a 95.8% gain. Facebook gained a 7.31% since Thursday after breaking out over its last top at $250.15
  • On July 30, Facebook made public its Q2 financial report
  • HSBC posted a neutral rating for Facebook on Wednesday, with a target of $195.00
  • Facebook, Inc. develops products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide.
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Disclaimer:
The viewpoints contained in this article are personal and not recommendations for you to buy or sell stocks. The author of this document does not have an understanding of the individual circumstances of the reader, his or her finances or his or her own best interests at any given time. All users should speak with their financial advisor before buying or selling any securities Opinions are expressed for education reasons only

Facebook stock chart overview

Should I buy Facebook stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. Trading strategies are meant for helping you in the decision process of what stocks to pick and when is the best moment to buy them. At Stocks2.com, we like to use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best

Is FB stock a buy?

Currently, Facebook stock doesn't match any of these trading strategies, so our recommendation is not to buy now. This doesn't mean we expect a selloff for FB in coming sessions, or that it may not climb higher. Simply, it doesn't match our recommended trading systems

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Should I sell Facebook stock?

"To sell or not to sell", if you are holding Facebook stock?. Just as when we have to buy shares, deciding when is the best time to sell is not a fickle decision, and we must use our own trading style. When selling, as well as buying, detailed setups are very simple to follow but are only valid for selling shares in your porfolio, not for shorting Facebook stock

As a golden rule, you should never hold a trading operation that yields greater losses than those expected at the time of purchase. When to sell shares should always be dictated by the stop-loss (automatic or manual)

Is it time to sell Facebook stock?

In the current situation of Facebook there is not any eligible sell setup, so Facebook stock holders with operations in green can keep their positions

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Analysts' recommendations to buy or sell Facebook stock

Brokerage firms and financial institutions post stock ratings based on their views of the market and the fundamental and technical situation of the analyzed stock. Unfortunately, the accuracy of these predictions is not very high, and certainly not a direct buy or sell signal

In the last 30 days, 23 analyst ratings were published for Facebook. General sentiment is bullish, with 19 out of 23 publishing optimistic outlooks

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Facebook ratings

Brokerage firmRating
Jul 27th, 2020
Wedbush Buy
Jul 28th, 2020
Deutsche Bank Strong buy
Jul 28th, 2020
Mizuho Strong buy
Jul 31st, 2020
Bank of America Strong buy
Jul 31st, 2020
Barclays Buy
Jul 31st, 2020
BMO Capital Markets
Jul 31st, 2020
BofA Securities Strong buy
Jul 31st, 2020
Canaccord Genuity Strong buy
Jul 31st, 2020
Credit Suisse Group Buy
Jul 31st, 2020
Goldman Sachs Group Strong buy
Jul 31st, 2020
Jefferies Financial Group Strong buy
Jul 31st, 2020
JMP Securities Buy
Jul 31st, 2020
JPMorgan Chase & Co. Strong buy
Jul 31st, 2020
Monness Crespi & Hardt Strong buy
Jul 31st, 2020
Morgan Stanley Buy
Jul 31st, 2020
Oppenheimer Strong buy
Jul 31st, 2020
Pivotal Research Neutral
Jul 31st, 2020
Raymond James Neutral
Jul 31st, 2020
Rosenblatt Securities Strong buy
Jul 31st, 2020
Royal Bank of Canada Buy
Jul 31st, 2020
Susquehanna Bancshares Buy
Aug 4th, 2020
Argus Strong buy
Aug 5th, 2020
HSBC Neutral

Technical analysis

Facebook stock started an uptrend in mid-March, and gained an amazing 95.8%. The chart shows higher highs and higher lows, and along the way provided some buying opportunities for those who wanted to enter. Latest low was on July 24, when price bounced at $226.90. On Thursday, Facebook broke out above its last top ($250.15) giving a good buy point

FB at new Highs

On Friday, Facebook hit all-time highs (ATH) again at $278.89

SMAs overview

A favorite tool of many trading systems are the moving averages, that easily show trend direction. A moving average is the average price of a stock over a set period of time. Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days

Supports and resistances

Investors use support and resistance levels as a way to spot price points in the stock price action that tend to behave as glass ceiling, containing the price of shares to move in certain direction. A support level is a level where the price tends to find support as it falls. This means that the price is more likely to "bounce off" this level rather than break through it. Nevertheless, if the price breaks down this level, it will probably continue descending until approaching another support level. On the other side, resistance levels are where the price tends to find a curb as it moves up. In the same way, the price is more liable to "rebound" at this level, and if it finally ruptures this level, it will climb more easily until it finds the next resistance

Price is at highs and there are not upper resistance levels.

The current support levels are:

  • S1: $250.15 (-6.81% below)
  • S2: $245.19 (-8.66% below)
  • S3: $226.90 (-15.47% below)
  • Bollinger bands

    So-called Bollinger bands are a popular studio designed by John Bollinger. By essence, the Bollinger Bands are lines that move around a centralmoving averagediffering in distance from the bottom to the top depending on market volatility. They are usually plotted by an interval of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Price levels both above or below the Bollinger Bands tell us that the price has has trended strongly to extreme highs or lows. At this point, the price is above the upper band, which should mean a possible short-term adjustment (at least) until it is below the band

    Relative strength index

    The relative strength index (RSI) is a technical indicator used in the analysis of stock markets. It is intended to map the current and historical weakness or strength of a stock or market based on the closing prices of a recent trading period. Like other oscillation indicators, the RSI moves between 0% and 100%. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in 1978

    Relative Strength Indicator climbed over the overbought line Friday, marking a reading of 71.28. Breaking through above the overbought zone is not a sell signal, as stocks can be above the level of 70 for many weeks and may continue to rise

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    Earnings and financials

    Facebook, Inc. (FB) posted EPS for the fiscal second-quarter that strongly surpassed Market expectations. Quarterly EPS was $1.80 per share versus $1.39. This Q2 report represents an earnings surprise of 29.5%. Revenue resulted of $18.7 billion compared to $17.2 billion forecasted by analysts.

    Same quarter last year, reported EPS was $0.91, so recently reported EPS is a gain of 97.8%. Revenue rose a 10.67% on an annualized basis in the second-quarter, from $16.9B to $18.7B last quarter. Facebook made 3 year over year quarterly positive results, improving sales by 80.9% from $10.3B on 2017-Q3.

    Facebook releases quarterly earnings report next October. Wall Street analysts estimate a per-share earnings of %s of $1.88, that is a 4.44% higher than Q2. If you hold or you are thinking of buying Facebook shares, be vigilant as financial reporting day usually has a very high volatility, and price can jump up or down with unsually low liquidity and not respecting your buy/stop-loss orders. You can probably obtain more details about the earnings call and the earnings reports on the Investor Relations section of its website: http://investor.fb.com.

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