Facebook Stock Attempts Bounce After Zuckerberg Announcement

Analysts remain hopeful of the beleaguered FAANG stock

Digital Content Manager
Nov 21, 2018 at 11:50 AM
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Facebook, Inc. (NASDAQ:FB) shares are up 3.4% to trade at $136.94 this morning, after CEO Mark Zuckerberg said he will not step down as chairman amidst the latest string of scandals. FB stock is still staring at its worst month since July, however, down more than 10% so far in November. In fact, shares of the FAANG stock touched their lowest point since January 2017 yesterday, before finishing higher. 

This rough spell for the FAANG stock has been going on since the bear gap from record highs in July. The equity has lost roughly 37% in that time frame, led lower by resistance at its 30-day moving-average. 

Despite Facebook's PR woes and sinking stock, analysts are still surprisingly bullish, with 26 of the 31 covering brokerage firms issuing a "buy" or better rating, with not a single "sell" in sight. The current 12-month price target of $196.87 sits high on the charts, too. The shares would need to rally about 43% from current levels to reach this target. Should today's rebound prove to be a "dead cat bounce," a round of downgrades and price-target cuts could exacerbate selling pressure on the shares.

Likewise, in the past year, short-term options players have rarely been more call-heavy. FB's Schaeffer's put/call open interest ratio (SOIR) of 0.68 sits in the 13th percentile of its annual range. However, that sentiment tide could be shifting, as buyers have been ramping up their bearish bets. FB's 10-day put/call volume ratio of 0.65 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the 75th percentile of its annual range, indicating that puts have been bought to open over calls at a faster than usual clip in the past two weeks. 

 

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