The strong momentum has enabled Facebook stock to breach major resistance levels. As can be seen in the chart, Facebook’s 50day and 200day SMA’s (Simple Moving Average) formed a death cross on Friday. A death cross is a crossover where the short term moving average crosses the long term moving average from the above. It is a strong sell signal. Here, the 50-day moving average crossed the 200-day moving average. However, riding on the momentum, the stock continued to move up.
The stock is now testing the 100-day SMA resistance line. The MACD has turned bullish, indicating that the stock continues to have strong upward momentum. If the stock is able to breakout above the resistance line, then it is likely to continue its upward move until the company’s earnings due on 1st Feb. (Also read: Facebook Inc Could Gain The Most From A Snapchat IPO In 2017).
Facebook Stock Is An Attractive Buy
Facebook Inc (NASDAQ:FB) is a fast growing company with strong fundamentals. In Q3, the company reported revenue growth of 55.8%, while earnings more than doubled from the previous year. On the profitability front, the operating margin (ttm) came in at 42%, while the net margin was 30%. The company has a strong balance sheet with more than $24B in cash and zero debt. It generated more than $3.5B cash in operations in the last quarter alone.
One of the main concerns surrounding Facebook stock was its sky-high valuation. But Facebook’s valuation has been coming down for a while now. Facebook stock is currently trading at a forward PE of 24. While in itself that may not be an attractive valuation, you must also take the strong growth into account. Facebook stock is currently trading at a Forward PEG (3) of 0.89.
Facebook Inc (NASDAQ:FB) continues to remain a strong favorite of Wall Street, with majority of analysts rating the stock a buy. Oppenheimer recently picked FB stock as its top internet pick for 2017 and Aegis Capital initiated its coverage on FB stock with a buy rating. The consensus price target for the FB stock is $154, which represents more than 23% upside. Facebook continues to remain a strong long-term buy.
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The article Is Facebook Inc (FB) The Top Internet Stock Pick For 2017? originally appeared on amigobulls.com. Watch our analysis video on FB.
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Additional Links:
(1) http://www.recode.net/2017/1/9/14211466/facebook-video-advertising-midroll
(2) http://finance.yahoo.com/news/oppenheimer-three-main-reasons-bullish-154539948.html
