Thursday, November 28, 2013

Facebook Inc (NASDAQ: FB)

Facebook, Inc. operates as a social networking company worldwide. It builds various tools that enable users to connect, share, discover, and communicate with each other on mobile devices and computers. The company's Facebook Platform is a set of development tools and application programming interfaces that enables developers to integrate with Facebook for creating social apps and Websites. As of December 31, 2012, it had 1.06 billion monthly active users and 618 million daily active users. The company has a strategic partnership with Trend Micro Inc. for educating and protecting users' digital lives against malicious sites and malware. Facebook, Inc. was incorporated in 2004 and is headquartered in Menlo Park, California.
FB could be forming a head and shoulders (H&S) pattern. Please take a look at the 1-year chart of FB (Facebook, Inc.) below with my added notations:
1-year chart of FB (Facebook, Inc.) FB has performed quite well over the last 5 months while creating a key level at $45 (blue). That $45 level, which has been recent support, is also the possible “neckline” for FB's potentially still forming H&S pattern. Above the neckline you will notice the H&S pattern itself (pink).
Remember, patterns such as an H&S need to confirm to have the meaning that they imply. Confirmation of the H&S would occur if the stock were to roll over and break below its $45 support. If FB does break that level, the stock should move lower from there.

The Tale of the Tape: FB could be forming a head & shoulders pattern. Although a trader could go long at $45 expecting a bounce, the stock's pattern would imply an eventual breakdown. If that happens, a short trade should be entered on a break of that $45 level.
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Margin Debt Soars To New Record; Investor Net Worth Hits Record Low

The correlation between stock prices and margin debt continues to rise (to new records of exuberant "Fed's got our backs" hope) as NYSE member margin balances surge to new record highs. Relative to the NYSE Composite, this is the most "leveraged' investors have been since the absolute peak in Feb 2000. What is more worrisome, or perhaps not, is the ongoing collapse in investor net worth - defined as total free credit in margin accounts less total margin debt - which has hit what appears to be all-time lows (i.e. there's less left than ever before) which as we noted previously raised a "red flag" with Deutsche Bank. Relative to the 'economy' margin debt has only been higher at the very peak in 2000 and 2007 and was never sustained at this level for more than 2 months. Sounds like a perfect time to BTFATH...(more)

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Porter Stansberry: The U.S. stock market could now fall by half

Our government's current debt-fueled policies are unsustainable and creating a huge crisis.

The simple fact is, if our government were required to pay a fair market rate of interest on its debt… the interest payments alone would swallow up all of our tax revenue (and then some).

Sooner or later, that fact will overwhelm the smoke and mirrors and the chicanery of quantitative easing. Sooner or later, that fact will overwhelm the passions of the world's banks that keep 60% of their reserves in U.S. dollars. Sooner or later, that fact will overwhelm the popularity of the U.S. dollar as the basis of international trade.

And make no mistake… China has had good reason to negotiate bilateral trade and currency agreements over the last 18 months with every single major trading counterparty in the world.

At some point, the Chinese will unveil a complete convertibility of its currency, the yuan. And when that happens, what do you think will happen to the value of the U.S. dollar? What do you think will happen to the actual rate of interest on U.S. Treasury bonds, especially long-dated bonds?

All of those things will change because, as I said yesterday, the markets over time are weighing machines. And I guarantee you the passions of the crowd change over time. So the current pricing for equities in the United States is based on 18 years of earnings.

Facebook is trading at a valuation of around 100 years of earnings. But what is the value of all those future earnings if the value of the dollar crashes? What is the value of all those future earnings, 15 years', 17 years' worth of earnings, if instead of the long bond being 3%, it was 8%?

If you do the math, if you do the dividend discount models, and you compare it with the risk-free rate, you can see for yourself that evaluations of U.S. stocks could easily fall in half.
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7 Remarkable Numbers From Canada’s Housing Market

No doubt real estate has been the saviour of the Canadian economy. Mostly thanks to all of those condo towers and housing developments, the country escaped the worst of the Great Recession.
Since the housing bull market began 20 years ago, the industry has posted some truly incredible figures. Here are the top seven most remarkable numbers from the nation’s real estate market.
1. 150% price increase
According to the Canadian Real Estate Association, the average house in Canada sold for $152,378 in 1998. Today, the mean house price has ballooned to $379,725. This represents a 150% price appreciation over that time frame — one of the best performances in the industry’s history.
2. 7.8x income
As you might expect, real estate prices have handily outpaced incomes. Over the past 15 years, the average full-time salary has increased at a 2.5% annual clip, versus house prices that have grown at a 6.3% annual pace.  (more)

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Dynavax Technologies (Nasdaq: DVAX): This Cheap Drug Stock Has 245% Upside

The first rule of running a biotech company: Don't run low on cash. Once investors smell a cash squeeze coming, they'll hammer shares mercilessly.
That was the painful lesson learned by the executives at Dynavax Technologies (Nasdaq: DVAX). Though DVAX was pursuing the development of a very promising new vaccine, the company was burning through more than $15 million in cash every quarter and was at risk of not making it to the FDA finish line. Shares, which traded around $5 in October 2012, skidded all the way to $1.
The good news is that the company shored up its balance sheet late last month, and shares have finally begun to rebound. And, with a few breaks, DVAX looks poised to rise from a recent $1.45 to $3, $4 or even $5.
Little Company, Big Target Market
DVAX has spent years developing Heplisav, which is a vaccine for hepatitis B, a disease that currently afflicts 240 million people around the world, according to the World Health Organization.  (more)

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Titan International Inc (NYSE: TWI)

Titan International, Inc., together with its subsidiaries, engages in the manufacture and sale of wheels, tires, and undercarriage systems and components for off-highway vehicles used in the agricultural, earthmoving/construction, and consumer markets in the United States and other countries. The company provides rims, wheels, tires, and undercarriage systems and components for various agricultural and forestry equipment, including tractors, combines, skidders, plows, planters, and irrigation equipment; and for various types of off-the-road earthmoving, mining, military, and construction equipment comprising skid steers, aerial lifts, cranes, graders and levelers, scrapers, self-propelled shovel loaders, articulated dump trucks, load transporters, haul trucks, and backhoe loaders. It also offers truck tires; wheels and tires; and assembles brakes, actuators, and components for the boat, recreational, and utility trailer markets, as well as a range of products for all-terrain vehicles, turf, and golf car applications. The company sells its products directly to original equipment manufacturers, independent distributors, equipment dealers, and distribution centers.
Please take a look at the 1-year chart of TWI (Titan International, Inc.) below with my added notations:
1-year chart of TWI (Titan International, Inc.) TWI has had a rough go of it over the last 9 months, to say the least. In a market that insists on going higher, TWI has continued to break lower. From June til mid-September the stock formed a clear support at $16 only to break lower yet again. Since that break, the stock has been resisting that same $16 area and appears to be approaching that level again.

The Tale of the Tape: TWI is approaching $16 again. Traders could enter a short trade at $16, while a long trade could be made on a break back above that level with a stop placed below it.
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