Facebook (NASDAQ:FB): Key Factors Point to a Bearish Chaikin Power Gauge Rating
Even though we need one year of data to compute our 20 factor Chaikin Power Gauge Rating, we know that Facebook would have a bearish rating because four of our key factors are clearly bearish.
• Valuation is Very Inflated
• Insiders Have Been Selling
• Chaikin Money Flow is Bearish
• Chaikin Price Trend is Down
We have even more evidence to support that conclusion.
Renren (NYSE:RENN) is called the "Facebook of China." As a social network whose shares have been trading in the U.S. since May of 2011, RENN has had a bearish Chaikin Power Gauge Rating since May 1 at a price of $6.33. It closed at $4.72 today, down -25% since the Power Gauge turned bearish.
The Facebook Power Gauge Rating would also be bearish today and will probably be bearish in six months.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.