Facebook NASDAQ:FB Remains Overvalued

Facebook NASDAQ:FB Remains Overvalued

People do get excited about Facebook NASDAQ:FB but in my opinion it remains extremely overvalued, and after the last rally on miscalculated potential mobile revenue it is ready to short again.

FB trades at a ridiculous PE and values as a business at less than $5 a share.

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Technicals

A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are ?high,? it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance.

Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.

During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.

An engulfing bearish line occurred (where a black candle?s real body completely contains the previous white candle?s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with FACEBOOK INC A). It then signifies that the momentum may be shifting from the bulls to the bears.

If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle?s real body.

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Current Statistics

Close: 30.948
Change: -0.772
MACD Value: 1.313
Signal Line: 1.016

The MACD can provide buy/sell indications in three ways, signal line crossovers, overbought/oversold conditions, and divergences.

Crossovers

Currently the MACD is bullish since it is trading above its signal line.The MACD crossed above its signal line 5 period(s) ago. Since the MACD crossed its moving average, FACEBOOK INC A?s price has increased 5.19% , and has ranged from a high of 32.210 to a low of 28.650.

Overbought/Oversold

The MACD is in an overbought range. Prices may continue to move higher for some time. Wait for prices to move lower before considering any short positions.

Divergence

There have been no divergence signals within the last 5 periods.

Source: http://www.livetradingnews.com/facebook-nasdaqfb-remains-overvalued-101103.htm

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