Markets are poised to pop into Tuesday’s opening bell with futures up about 5% in the premarket, having hit ‘limit up’ on optimism that a coronavirus rescue bill is close to being passed. After yesterday’s close of -3%, volatility remains in place, as do unique trading opportunities courtesy of exclusive financial data.
Our new COVID-19 reality confronts us with a challenge: stop our physical selves from being in contact with almost everything and everyone, yet remain connected in all possible ways. Coincidentally, that’s the virtual world Facebook (NYSE: $FB) has been building all along.
In a recent statement to the Wall Street Journal, Facebook’s CEO, Mark Zuckerberg stated that users are increasing and expanding daily employment of Facebook Groups, Facebook Live, the Portal video-calling box, and Instagram (which is owned by Facebook) as social distancing and stay at home orders have been increasing.
Given Facebook is a company which is heavily dependent on data collection and advertising revenue and is being used more by customers each day according to its Chief Executive, one could argue that with increased demand comes increased financial sentiment. Therefore, a possible upgrade or price target increase by a financial institution in the days – or even hours – to come is not unexpected.
Even in the eyes of a trader, I believe that if a company has increasing demand, it has what every company wants as a standard pillar of business. After all, without demand, it’s difficult for a company to be profitable or to elicit a bullish stance from the brightest minds on Wall Street.
Financial professionals may catch on to the fact that with increasing use of Facebook and its features, Facebook’s revenue may actually be seeing a boost through its main streams of income given consumer demand may continue to increase in the days and weeks to come.
Through my experience, this is typically the time when financial institutions may upgrade a stock or increase its price target – simply backed by demand increasing, paired with increasing revenue.
While Facebook has declined in price per share with broader markets in recent weeks, indicated in the chart above, the stock itself has been in a consolidation phase since March 16 of 2020, forming support at a low of $143.10.
Should Facebook remain trading above $143.10 support through the first hour of the trading session today, taking into consideration that Facebook has a bullish catalyst of increasing consumer demand paired with futures trading about 5% higher, I’ll look to make a possible bullish trade on Facebook, targeting about $163, a resistance level established on March 9 of 2020.
TrackStar featured Facebook as a stock financial professionals had been heavily focused on. From a financial fundamental and technical trading point of view, I hope that now you may understand exactly why.
America’s #1 Premarket and Day Trader
Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.