Based on the chart and two models -- ARIMA(5,2,1) and Monte Carlo using the last 250 days of trading -- FB is projected to reach 185 in the next 17 days with a return volatility of 9. The chart also indicates a strong trend which also targets 187 by Feb 16th.
From a fundamental perspective, the recent drop in FB due to Zuckerberg's recent announcement of a potential restructuring is highly unfounded. The income statements and balance sheet of the company are both very healthy. Although FB has seen a slowing new user growth rate, their ability to optimize the business model, mainly based in advertising, is having a positive impact on their revenue stream which is growing at a faster rate every year.
Conclusion -- strong trend + strong fundamentals + and a recent unfounded drop based on Zuckerberg's tweet = opportunity.
From a fundamental perspective, the recent drop in FB due to Zuckerberg's recent announcement of a potential restructuring is highly unfounded. The income statements and balance sheet of the company are both very healthy. Although FB has seen a slowing new user growth rate, their ability to optimize the business model, mainly based in advertising, is having a positive impact on their revenue stream which is growing at a faster rate every year.
Conclusion -- strong trend + strong fundamentals + and a recent unfounded drop based on Zuckerberg's tweet = opportunity.
Trade closed: target reached
Closed both 180 and 185 Calls at 192-195 post earnings.Result:
-> 180 Feb 16th Call, purchased @ $5.53, sold @ $15.00, 166% return
-> 185 Feb 16th Call, purchased @ 5.22, sold @ $8.50, return 63%
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.