Momo Inc. (MOMO)

Momo stock forecast: buy or sell

Momo stock outlook

  • Momo closed on Friday at $19.77 after collapsing a -3.47% breaking a streak of 5 sessions in negative.
  • Momo Inc. operates a mobile-based social and entertainment platform in the People's Republic of China.
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Important:
The comments contained in this post are personal and should not be followed as recommendations for you to buy or sell shares. The author of this text does not have any knowledge of the particular circumstances of the reader, his or her own 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 Viewpoints are expressed for informational motives only

Momo stock chart overview

Should I buy Momo 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 MOMO stock a buy?

Currently, Momo 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 MOMO in coming sessions, or that it may not rise higher. Simply, it doesn't match our recommended trading systems

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Should I sell Momo stock?

When you are a novel trader and you own a stock with some profit, it's really difficult to decide the good moment to sell and get your profits. Trading strategies give us the ability us to avoid impetuous decisions based on our moods or the noise that surrounds the market. When selling, as well as buying, detailed strategies are very easy to use and are only applicable for selling shares you already own, not for selling short Momo stock

As a rule of thumb, you must never keep an open trade that produces greater losses than those expected by the time of the buy. The moment to sell shares must always be ruled by the stop-loss (automatic or manual)

Is it time to sell Momo stock?

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

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Analysts' recommendations to buy or sell Momo 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 we couldn't find any rating for Momo

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Technical analysis

SMAs overview

A favorite tool of many traders are the moving averages, that easily show trend momentum. A moving average is calculated as the simple mean of the previous N periods (usually sessions). Usual time periods used for moving averages are 21 days, 50 days, 100 days and 200 days. Further about Moving Averages from sources like Wikipedia and Investopedia

Supports and resistances

Technical analysts use supports and resistances as a way to identify price points in the stock price action that tend to work as obstacles, containing the price of a stock to move up or down. Supports are levels where the price may stop as it falls. Price is more likely to "bounce off" this level rather than break through it. However, if the price breaks down the support, it is likely to continue descending until meeting another support level. On the other hand, resistance levels are where the price may find opposition as it rises. In the same manner, the price is more likely to "bounce off" at this level, and if it finally breaks this level, it will climb easily until it meets the next resistance

The current resistance levels are:

  • R1: $19.91 (0.71% above)
  • R2: $20.69 (4.65% above)
  • R3: $21.36 (8.04% above)
  • The current supports are:

  • S1: $19.08 (-3.49% below)
  • S2: $18.55 (-6.17% below)
  • S3: $17.48 (-11.58% below)
  • Bollinger bands

    This is an indicator that was created in the 1980s by John Bollinger. In essence, the Bollinger Bands are lines that move around a centralmoving average and vary the distance from the bottom to the top depending on market volatility. They are usually plotted by an offset of two standard deviations, above and below, from a moving average line. Bollinger himself recommends the moving average period to be 20

    Since the price surpassed the upper band on Thursday, the price sliced by 4.45%. The price is moving very close to the upper Bollinger band, signaling some level of overbought in recent sessions. This is not a sell point, as price can trade in these levels for many days and weeks

    Relative strength index

    The Relative Strength Index is an oscillator-type indicator that track price action to reveal when the share or financial asset is overbought or oversold. Oscillator indicators, such as relative strength, are designed to indicate values in the range of 0-100. The relative strength indicator is one of the best known and most widely used indicators, and it was invented by J. Welles Wilder in the late 1970s

    When the Relative Strength Indicator fluctuates for so long below 70 and above 30, without any indication of overvaluation and undervaluation, the indicator gets of little use, and we are now in one of these cases.

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    Earnings and financials

    Momo Inc. (MOMO) reported adjusted EPS for the fiscal Q1 that slightly uplifted Market expectations. Quarterly EPS was $5.52 per share vs. $5.24. This quarterly report represents an earnings surprise of 5.34%. On the contrary, reported sales were $3.6 billion, aligned with analysts' estimates.

    Compared to the same quarter last year, EPS was $4.06, so current EPS means a gain of 35.96%. Turnover merely moved on an annualized basis in the 1st-quarter, from $3.7B to $3.6B last quarter.

    Momo is posting Q2 earnings report on late next August. Analysts estimate an Earnings per Share of $0.42, that is a 92.39% lower than previous quarter. Earnings reporting day has a more than usual risk for traders as the results published can gap up or down the shares price with lower liquidity and not honouring your buy/stop-loss orders. You can find more information about the earnings conference call and the financial reports on the Investor Relations section of its website: http://www.immomo.com.

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