Facebook Post Earnings Trade

FB-Congressional-hearing

A few days have pasted, allowing a better read when considering a Facebook post-earnings trade. Despite the Congressional posturing that we saw last week, Facebook is still growing it’s ad-revenue faster than anticipated, a key concern last week going into earnings.

Facebook Ad Revenue

Advertising revenues, which are the backbone of the company’s rapid growth, saw a 49% increase this year to $10.1 billion for the third quarter. Total revenues grew 47% or $10.3 billion.

Mobile ad revenues, the area where analysts perceived a headwind, surged 57% year over year to $8.9 billion, representing 87% of the total ad revenues.

Ad impressions grew to a better than expected 10%, driven by increasing mobile ad impressions, with it’s Instagram platform adding to overall performance.

Average price per ad, as reported by Zacks, increased 35% from the year-ago quarter. The acceleration reflects increasing demand for Facebook’s platform for displaying ads.

Ad-revenue
Ad Revenue: Source Seeking Alpha

Facebook Technicals

We are looking for a continuation day, as buyers show interest along the chart’s rising 9ema. Price action is moving into an area off no overhead supply, with volume above average for the past 7 trading days, despite the spike last Thursday. Overall, this metric shows institutions are still interested. In addition, RSI has urned back up and MACD is above it’s signal line, confirming that bulls are still in control of momentum.

FB-Daily-11-07

Monday performance prompted a starter position. We will add, using the Trade of the Day (ToD) setup for additional entry positions. A close near the high of the day will trigger a swing.

We will consider adding to NFLX, AABA, and BABA, if conditions present themselves today.

Happy Tuesday,

Vinny

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Vinny Gambini

Trade Fundamentals w/ Technical Analysis - CANSLIM method using high probability setups and Ichimoku Trend Analysis. Architect, Family Man and Father of three.