Buy Facebook, Short Yelp According To The Forcerank Social Media Game This Week

1. Facebook (FB): The affectionately referred to FANG stocks all edged up to start this short trading week. Facebook is already up 4% this week with many believing that there is still room to run. Most analysts recommend Facebook as a “buy” as it continues to see growth in monthly active users. Just today, Morgan Stanley upped its price target on the social media giant from $150 to $160, implying an additional upside of more than 20%. At the same time, the moving average convergence/divergence indicator made a bullish crossover supporting the trend.

2. Alphabet (GOOGL)

3. Twitter (TWTR): Investors, and apparently the Forcerank community, seem to be praying today’s big meeting was to discuss potential takeover targets. Twitter has been beaten down amid increasing competition and sluggish user growth. Shares are down 56% since its IPO in mid 2014 so it’s surprising to see Twitter so high on this list. However the latest takeover rumblings have sparked a 30% climb in the past three months. Twitter has struggled to find its identity under the current management so any shakeup would likely continue this recent uptrend.

4. Match Group (MTCH): While Match Group is ranked in the 4th position its average user ranking has steadily declined over the past 3 weeks. The stock has trended downward over this time and continues to head in that direction. Shares are still overbought and volume is quickly dwindling, creating additional downside. The 50 day average is about to cross over its even shorter 20 day average, often a bearish signal to short-term traders. Seeing as the stock is down about 0.7% today alone, it won’t be surprising to see Match drop down in future weeks.

5. YY Inc (YY)

6. Microsoft (MSFT)

7. Weibo Corp (WB)

8. NetEase (NTES)

9. Yandex (YNDX)

10. Yelp (YELP): Yelp is the worst ranked stock in this week’s social media game. There is a huge gap which has yet to be filled after the company reported earnings in early August. This has slowly worked itself down and by late August the moving average convergence/divergence made a bearish crossover. At the same time the Relative Strength Indicator and Bollinger Band both suggest shares are overbought. Most widely used technical indicators support a step back from this stock that has performed well this year. It doesn’t help that Yelp is trading at 57 times forward earnings, a mark that is often considered overvalued.

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Disclosure: None.

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Chee Hin Teh 7 years ago Member's comment

thanks for sharing