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Facebook Earnings Untouched By Bad Publicity?

|About: Facebook, Inc. (FB)
Summary

Earnings reality check tonight.

Untouched by U.K. fine and bad publicity?

Bounce from $149 says “yes”.

Will guidance say “yes” ?

Facebook (FB) price has returned as if nothing ever happened and now we find out if that is really true. Our thesis is that expectations are too high going into earnings and there will be a reality check pullback in price to test support. Even if FB is back to normal and has solved all of its challenges for the time being, price has a habit of selling off after an earnings pop.

Here is our very optimistic chart tracking both fundamental and technical buy signals going into earnings. Analysts have raised their targets to $250 and $275 going into earnings and that has fueled high expectations. However, the analysts’ consensus target is only $231 and I think that will stop this bounce for a retest of support.

Here is our proprietary chart:

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