Facebook shares suffered a sharp dip during the global equity slump last month but it looks like price is ready to resume the uptrend. The stock is back above trading the 100 and 200 moving averages on the daily time frame, confirming that the climb might carry on.
Stochastic is on the move up, also indicating that further gains are possible. RSI is climbing as well, which means that buyers are back in the game. Further rallies could take Facebook shares up to the previous highs just below $100/share while another break below the moving averages could confirm that a reversal is still possible.
Facebook Shares Outlook
Facebook shares were able to gain traction after the company reported an ad expansion in Instagram, one of its recent acquisitions. This could spur more revenue for the social media platform, paving the way for stronger earnings figures down the line.
Prior to this expansion, ad spots were available only in eight countries but it has now been increased to 30 countries. The company hinted that it could have as much as 200 countries by the end of this month.
Instagram boasts of 300 million active users each month, which means that there will be a lot of eyeballs for advertisements, in addition to the current viewership on the Facebook platform itself. Advertisers can also have the option of buying 30-second video ads or photo ads.
Analysts project that ad revenue from Instagram could add as much as $1.5 billion for the company next year and nearly $3 billion in 2017, providing additional support and positive prospects for Facebook shares and earnings in the coming months.
Another factor supporting Facebook shares these days is the latest statistics report from the social media company, which indicated 15 million active users in Nigeria and 4.5 million active users in Kenya. Year-over-year users across all of Africa grew to 120 million this June from 100 million users in September, Reuters reported.
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