Use Weakness in Facebook as a Long-Term Opportunity

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Trader Gregory Rowe works on the floor of the New York Stock Exchange, Monday, Feb. 24, 2020. Stocks are opening sharply lower on Wall Street, pushing the Dow Jones Industrial Average down more than 700 points, as virus cases spread beyond China, threatening to disrupt the global economy. (AP Photo/Richard Drew)

Facebook (FB) has become severely oversold.

A day after outages went the social media stock down more than $12 a share, it’s bouncing back at double bottom support.  RSI, MACD, and Williams’ %R are all wildly oversold, as well. From a current price of $333, we’d like to see an initial bearish gap refill around $340.

Eventually, we’d like to see it back to $380 a share – with patience.

Sure, whistleblower testimony is being heard now, but a good deal of what’s being presented about Mark Zuckerberg is already known to the public.  Also, it’s tough to bet against a company growing as rapidly as Facebook with Q2 revenue growth of 56% and EPS growth of more than 100% year over year, with 2.9 billion monthly active users.

We’d use weakness in Facebook as opportunity.