Thursday, April 03, 2014

Facebook, Twitter, and Visa

Here are three daily charts of the current bull market leaders. All three are below their 50 day moving averages in contrast to the Dow and the S&P 500 which are above theirs. I suspect this is an clue which tells us that the current bull market may be nearing its end. However until both the Dow and the S&P fall below their 50 day moving averages I think it would be mistake to operate on bearish premises.

The drop in Facebook (FB) has been just about as large as the last reaction and had brought the stock down to support at its two most recent highs. FB is still well above its rising 200 day moving average so I think FB still has a good shot at making new highs. If it can climb back above its 50 day average the upside target would be around 90.

Twitter is action visibly worse than the other two stock. But here too there is reason for thinking the drop from its top at 75 is nearly over. My downside target is the historical low in TWTR which is 37. This is also half of its high. From there I think there is a good chance that TWTR  will rally at least back to 60 depending on general market conditions.

Visa is trading near the low of a 25 point trading range. The drop from its high has matched the size of the biggest drop on the way up. I think V is in a bullish situation and expect it to resume its advance. Upside target will be 245 - lower than the 265-270 target I had been projecting. If V instead starts trading below 210 for a couple of days I think continuation down to 195 will become likely.

No comments: