close icon

Can Facebook ‘s Privacy Concerns Fulfill this Setup?

Facebook ‘s privacy policies are under the microscope once again. Personal e-mails uncovered during an FTC investigation reveal Mark Zuckerberg knew of the company’s problematic privacy practices.

Facebook stock still hasn’t been able to fully recover from the crash in the second half of 2018, which dragged the price from $218.62 down to $123.02. How big Facebook ‘s privacy troubles and what the market’s reaction will turn out to be remains to be seen.

Unfortunately for the bulls, there is an Elliott Wave pattern already in place. It indicates the bears are eager to take advantage of any potential bad news in the following months.

Elliott Wave pattern indicates Facebook stock can tumble 40%

The weekly chart above reveals Facebook ‘s entire stock price history since the company’s IPO in 2012. Starting from the bottom at $17.55 there is a five-wave impulse pattern travelling all the way up to $218.62 in 2018. It is labeled (1)-(2)-(3)-(4)-(5), where the sub-waves of waves (1) and (3) are also visible.

Facebook Bears Waiting for a Catalyst

According to the Elliott Wave theory, a three-wave correction in the opposite direction follows every impulse. And indeed, the market totally ignored Facebook ‘s strong revenue and profit growth in 2018 and pushed the stock down ~43% by December.

It looks like this sharp selloff is also a five-wave impulse in the position of wave (a). If that is correct, the recent recovery to $198.50 must be wave (b), meaning wave (c) down can now be expected. The renewed scrutiny into Facebook ‘s privacy policies can be the excuse the bears have been waiting for.

Of course, something totally different and unexpected can serve as the trigger instead. Nevertheless, as long as FB trades below $198.50, targets near $100 a share in wave (c) of II remain plausible. Once the 5-3 wave cycle is complete the odds will once again tilt in the bulls’ favor.

Did you like this analysis? Similar Elliott Wave setups occur in the Forex, crypto and commodity markets, as well. Our Elliott Wave Video Course can teach you how to uncover them yourself!



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

JPMorgan: Risk is High After 10 Years of Bull Market

Between March 2000 and March 2009, JPMorgan Chase & Co. investors saw their holdings’ value decline by almost 78% as the stock fell from over $67 to less than $15 a share. The next ten years, on the other hand, have been a wonder to behold. JPM stock rose like a phoenix from its ashes,…

Read More »

SERV Stock Sets the Stage for a 40% Tumble

ServiceMaster Global Holdings, founded in 1929, is a cleaning and pest control company headquartered in Memphis, Tennessee. The company went public in 2014 and has delivered very generous returns for its shareholders since. SERV stock took off from $11.54 in August 2014 and climbed to as high as $56.50 earlier this month. A 390% total…

Read More »

IAC Stock ‘s Future May Not Resemble its Past

InterActiveCorp. or IAC for short, is a $19 billion media and internet services company. It is the controlling shareholder of Match Group, which in turn operates Tinder – the online dating app. IAC stock was beaten down heavily during the Financial Crisis. In March 2009, IAC stock fell to $13.23 a share, down 92.3% from…

Read More »

Humana Stock Bulls Haven’t Lost the Battle Yet

Humana (NYSE:HUM) climbed to an all-time high of $356 in early November 2018, following a rally from as low as $18.57 in March 2009. In less than ten years, the company rewarded the patience of its investors with a total return of over 1820%, not counting dividends. Unfortunately, the last six months were nothing like…

Read More »

T Rowe Price Vulnerable After Fibonacci Encounter

Founded in 1937 and based in Baltimore, Maryland, T Rowe Price is one of the largest asset management companies in the world. At the end of Q1 2019 its assets under management stood at $1.11T. That is T for trillion. Besides, T Rowe Price is also a public company which is why it is of…

Read More »

Momo Inc. – The Tinder of China Looks Promising

Based in Beijing, China, Momo Inc. operates a mobile-based social and entertainment platform. The company was founded in 2011 and became public in late-2014. The Tinder of China, as Momo is often referred to, first turned a profit in 2015 and has been enjoying strong earnings and revenue growth in the last three years. Momo…

Read More »

TTD Stock: Don’t Let that 8-fold Surge Seduce You

The Trade Desk Inc. provides a self-service omni-channel software platform enabling clients to purchase and manage data-driven digital advertising campaigns. TTD stock is trading on NASDAQ since September 2016. In less than three years, the shares have surged from the IPO price of $28.75 to over $232 earlier this month. Early investors have managed to…

Read More »

More analyses