Thursday, January 09, 2014

Facebook, Twitter, and Visa

I last commented on Facebook, Twitter, and Visa in this post.

Since then Facebook has made new highs but still has a way to go before hitting my upside target around 73. If FB rallies from its recent low near 43 by the same amount that it rallied from its low near 22 it will hit 78 or so before the next big reaction sets in (blue rectangles).

Twitter's performance has been even stronger. Since my last post TWTR had rallied right to the edge of the 75-78 target zone I cited then. The subsequent reaction has run about 18 points. The midpoint of its two month trading range is at 57 (red line) while a drop from 75 which is twice as long as the drop from its first post-IPO high at 50 would amount to 22 points and would stop near 53 (blue line). I expect TWTR to hold one of these support levels and then make a move to 85 or so.

Visa has been relentless advancing but still has a way to go before entering my 260-275 target zone. In the mean time there have been reactions on the way up of 25 and 20 points and that is about the most I would expect on the downside for the next reaction (blue rectangles). Support levels at temporary tops on the way up are highlighted in green.

The trend of the general market is still upwards as the Dow, S&P 500 and the NYSE advance-decline line are all above rising 50 and 200 day moving averages. Even though market sentiment is very bullish I find it hard to believe that a bull market top will develop until both volume and volatility pick up noticeably. In any event the first danger sign will occur when two of these three indicators drop below their 50 day moving averages.

1 comment:

Tim- said...

FB and TWTR will never turn out to be Google.

GOOG, FB, TWTR this year will do 48 Billion in net revenue (ex TAC)

Global Ad spend in all forms is just under 500 Billion. and in 5 years it will only be estimated at 650 Billion

estimates for GOOG, FB, TWTR in 5 years are 103 Billion in net revenue (ex TAC)

so we assume FB and TWTR and GOOG will grow revenues faster than ad spending itself. ok? but what happens when the model for ROI changes in social network advertising? Not only that, in 5 years there will be a new platforms for marketers to reach consumers.

Google is a great business model. FB and TWTR will end up being ok but their valuations will never come close to what google is

GOOG 20 dollars in rev per user
FB 5 dollars in rev per active user
TWTR 3 dollars in rev per active user