As it always goes in markets, a stock gets full attention of analysts and media when its price moves higher but it disappears to the background when after it corrects. Most investors tend to follow the news, it is only a minority of investors who continue to follow a stock or market when it loses momentum.
Case in point: Facebook’s stock price is getting upgraded in recent days right at a time when it is ready to challenge its all-time highs. Investor’s Business Daily reports that Facebook’s stock price got upgraded by Raymond James. Nasdaq.com adds to this that the upgrade of Facebook’s stock price is due to a rising margin: the rhythm at which revenues rise outpaces costs.
Investing Haven’s research team sees Facebook’s recent retracement as a bullish sign. Facebook’s stock price recently tested the bottom of its secular uptrend. It bounced higher which suggests there is sufficient bullish energy for Facebook to easily move to all-time highs in 2017.
The daily chart of Facebook’s stock price is even more interesting. Facebook’s daily shows the consolidation which started early 2016. The $132.50 level is quite important. Why? It is not only the stock’s all-time high, but a break above it would signal a bullish breakout which, in turn, would induce a lot of bullish energy. As said earlier, investors become excited once a price is rising. That is fueled by financial media. And it becomes a vicious cycle … at least for a while.
Facebook Inc (NASDAQ:FB) closed at $128.34 on Friday, up $1.72 (+1.36%). Year-to-date, FB has gained 11.55%, versus a 1.57% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Investing Haven.