How Facebook’s Stock And Twitter’s Stock Look Following Earnings
Facebook Inc (NASDAQ:FB) reported a second-quarter earnings beat, a week after Twitter Inc (NYSE:TWTR) also beat expectations. Both stocks sold off following their results, although Twitter gapped up before losing all of its gains over the following two trading sessions before rebounding.
Traders and investors were likely concerned about both company’s continued future growth. Facebook warned its revenue may decelerate over the second half of 2021 while Twitter’s monthly daily active users have already begun to decline.
Despite concern over the companies’ revenues going forward a number of analysts increased their price targets for both the social media giants. If Facebook’s sell-off, like Twitter’s, is followed with investors buying the dip, both stocks could be headed for new highs.
The Facebook Chart: On Thursday Facebook’s stock gapped down over 3%, negating the bull flag break the stock had set up going into its earnings print. The stock briefly lost support at the $348 level, but bulls came in and bought the stock and drove it back up above the level.
As of Thursday morning, Facebook was printing a long-legged doji candlestick on the daily chart which indicates indecision. A long-legged doji most often comes after a significant advance or decline and can also mean a reversal is in the cards. Bulls may want to wait and see Friday’s candle to verify Facebook is headed back up.
See Also: Facebook Bets Big On Metaverse: Why It’s Important For The Industry, FB Stock
The gap down caused Facebook to lose support of the eight-day exponential moving average (EMA) but the stock is still trading above the 21-day EMA, with the eight-day EMA trending above the 21-day EMA. Bulls will want to see Facebook regain the support of the eight-day EMA. Facebook is trading well above the 200-day simple moving average (SMA) which indicates overall support in the stock is bullish.
Bulls want to see Facebook pop above the eight-day EMA and for big bullish volume to push the stock back up toward its all-time high of $377.55. If it can jump above the level, Facebook could make a blue sky run.
Bears want to see Facebook’s stock continue to reject the eight-day EMA and for selling pressure to drop it down under a support level near $358. If Facebook loses the level, it could trade back down near $349.
The Twitter Chart: When Twitter’s stock shot up after its earnings print, it slammed into a former resistance level at $73.22 and sold off. The stock has since rebounded and on Thursday was trading up almost 1% higher but on very low volume.
The low volume may not concern bulls, because the previous days volatile price action needs to be consolidated, and Twitter was in the process of printing a possible bullish opening Marubozu candlestick. Bulls will want the candlestick pattern to hold throughout the day or for continued momentum to turn the candlestick into a full white Marubozu.
Twitter is trading above the eight-day and 21-day EMAs with the eight-day EMA trending above the 21-day EMA, both of which are bullish indicators. The stock is also trading above the 200-day SMA.
Bulls want to see continued momentum push Twitter’s stock over the $73.22 mark. If it can regain the level as support, there is not much resistance until the stock’s all-time high of $80.75.
How to Approach Rockwell Automation as It Continues to Grind Higher
For his last Executive Decision segment of Wednesday’s “Mad Money” program, Jim Cramer checked in with Blake Moret, chairman and CEO of Rockwell Automation (ROK) , a producer of industrial automation technology that just posted 26% organic growth.
Moret said Rockwell’s mission is to empower highly trained and engaged workforces with state-of-the-art factory automation technologies and systems. Rockwell’s recent acquisition of Plex Systems will extend its capabilities with all new cloud-native software solutions.
Moret said e-commerce companies and warehouses need conveyors, sorting machines and communication systems to run efficiently. And while Amazon (AMZN) is a big Rockwell customer, Moret said many other retailers are upgrading their operations.
Let’s check out the charts of ROK. In our last review back on Feb. 5 we wrote, “Defer purchases of ROK for now. Wait for a new base pattern to develop.”
In this updated daily bar chart of ROK, below, we can see that ROK made an upper-level base pattern from March to the end of May and then a fresh rally started. Prices are back above the rising 50-day moving average line and above the bullish but slower-to-react 200-day average line. The On-Balance-Volume (OBV) line has been very strong from early June and tells us that buyers of ROK have been very aggressive. The Moving Average Convergence Divergence (MACD) oscillator is well above the zero line, but the two moving averages that make up the indicator are right on top of each other. A buy or sell signal could come quickly.
In this weekly Japanese candlestick chart of ROK, below, we see a constructive picture. Prices are in a longer-term uptrend and trade above the rising 40-week moving average line. The weekly OBV line has an upward bias and the MACD oscillator is bullish. The current candle is not over for the week but it could be a long-legged doji and the possible start of a top reversal. We need to keep an eye on this.
In this daily Point and Figure chart of ROK, below, we can see a potential upside price target of $346.
In this weekly Point and Figure chart of ROK, below, we can see the software is projecting a potential longer-term price target in the $390 area.
Bottom line strategy: Traders who are long ROK should hold with a $279 stop. Add to longs or initiate longs above $303. The $346 area is our first price target.
GBP/JPY Price Analysis: Bulls cheer Wednesday’s dragonfly Doji to aim for 150.00
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