Facebook Inc (NASDAQ:FB) — FB stock has nearly recovered all of its losses from last week’s Brexit meltdown, but shares are still trading more than 5% off their all-time high, made in mid-May. With the fundamentals and technicals pointing to new highs ahead, traders should act quickly to pick up FB stock at a discount.
Facebook went public just over four years ago and is now one of the largest internet companies in the world based on both market cap and its 1.5 billion monthly active users.
S&P Capital IQ Equity Research reiterated its “Buy” rating on FB stock in April and increased its 12-month price target by $20 to $150, which is more than 30% above Thursday’s close.
Its analysts expect Facebook’s strong revenue growth to continue as the company continues to grow advertising sales, particularly mobile ad sales. They anticipate a 45% increase in 2016 total revenue and a 33% increase in 2017.
Facebook is expected to report its second-quarter earnings at the end of the month. The consensus estimate is for a 62% jump in earnings to 81 cents per share on a 48.5% rise in revenues.
Turing to the chart, FB stock broke from a 12-month consolidation in June 2015 at about $75. It then established a powerful bull channel with a spread of about 20 points from support to resistance. Current support is near $108 with resistance at about $125. Further support is at the 200-day moving average at $107.
Shares declined to the bullish support line on the Brexit panic, but it held and they jumped from that line to challenge the 50-day moving average at $116.
Traders should buy FB stock under $115 with a target of $130 for a potential gain of 13%. Investors should also consider buying and holding FB stock for the chance at much bigger capital gains.
