Facebook (NASDAQ 🙂 reports the results for the first quarter after the market closed on Wednesday, April 24. Expectations are for earnings per share of $ 1.61 billion, down from $ 1.69 for revenue of $ 14.97 billion – dramatically higher than the reported $ 11.97 billion Q1 last year.
The social media giant has exceeded EPS expectations since at least October 2013 and has only missed out on revenue estimates three times in the same period. This powerful performance has increased the company's stock to more than 100% since Facebook became public on May 18, 2012. And while the shares plummeted with the rest of the market at the end of 2018, the shares have since recovered more than 38% to close yesterday's session at $ 181.44.
Conflicting reports from the technicals mean that the future direction of the shares is not as clear as we would like. However, hidden under the noise, we see convincing signals that the direction of the shares remains upward.
FB Dagblad
Facebook & # 39; s map reveals an intriguing dynamic, in which bulls have shown weakness in the midst of a market characterized by low participation – both measured by volume and width, both of which offer a negative deviation from the rising price. The momentum also appears to be slowing when it reaches overbought levels and meets the resistance of earlier momentum highs, early March and before, early February.
The shares saw a positive development on Thursday, when the price jumped from $ 178.38 at the opening to $ 179.25 at the close. The most interesting was that the climb was supported by the highest volume since 9 April, indicating interest in the stock, even if this is less the case in the wider market
The stock had previously shown weakness, first with a peak in March that barely climbed higher than the previous one posted in February. On the other hand, when the prize languished from April 3, because the shooting star of that day offered an omen of weakness.
However, the prices managed to climb above the resistance on April 12, pulling the 50 DMA above the 200 DMA, creating a golden cross. The prize managed to stay over the resistance, even if it barely and sideways, until the solid green candle of Thursday
That dispelled two possible bearish patterns, a Head & Shoulders top and a rising wedge. The first simply follows a gradual reversal of supply and demand. The second projects a frustration of bulls who lose their patience because the profits gradually decrease.
Whatever the dynamics, both are bearish. The fact that prices detached themselves from these patterns, however, is considered bullish, because the bearish implications of the evolving patterns may have created an important bear trap, triggered a short squeeze and long positions
Trade Strategies
Conservative traders would not anticipate income to prevent unpleasant surprises.
Moderate traders may be in a position if today's prices are higher, especially if the broader market shows weakness and FB has established a port stock.
Aggressive traders can now take a long position, provided that this fits in with their account management.
Trade sample
Listing: $ 180
Stop loss: $ 175
Risk: $ 5
Target: $ 195
Reward: $ 15
Risk-Reward Ratio: 1: 3
