Facebook Inc (NASDAQ:FB) was still rising on Monday, gaining as much as 4 percent after last week’s positive earnings report. The stock hit its highest level since May of last year. Investors are excited about the strides made by the social network in mobile advertising.
But will Facebook shares keep rising? Forbes contributor Rocky White did a study of large cap stocks to get a clue about what’s next for the company’s stock.
Marathon Partners Equity Management, the equity long/short hedge fund founded in 1997, added 8.03% in the second quarter of 2021. Q2 2021 hedge fund letters, conferences and more According to a copy of the hedge fund's second-quarter investor update, which ValueWalk has been able to review, the firm returned 3.24% net in April, 0.12% in Read More
Facebook makes big moves
What’s been so extraordinary about Facebook Inc (NASDAQ:FB) over the last couple of days was the large moves its stock made. Right after the big earnings report, the stock rose 30 percent, and the fact that it is continuing its gains today is interesting as well.
White compared Facebook’s movement to the stocks of other companies with market caps of at least $10 billion and which gained 10 percent more in a day, just like Facebook did. He found that the average return after two weeks was .17 percent, and by the end of two months, it was 2.51 percent.
As a result, he determined that most of any stock’s movement must be happening from the two-week mark until the end of the two-month measuring period.
Will Facebook give up ground?
According to White, the key is to watch Facebook Inc (NASDAQ:FB) and see if it pulls back at all over the next two weeks. He said the numbers indicate that if it does, then it might be a good time to buy into the social network.
So right now the only question is if this will happen, and so far Facebook Inc (NASDAQ:FB) doesn’t show any signs of slowing down. Analysts have just begun revising their price targets up over the company’s initial public offering price. This indicates that sentiment surrounding the company might be turning. If this is the case, then we might not see the company’s shares retreat significantly over the next couple of weeks. This will be an interesting one to watch.