FB - another day, another dollar lower

Facebook (FB) continues on its decline towards fair value. It is certainly very pleasing to see this over hyped and overvalued company see continued declines. Yet, we are still some $6 from reaching the first target zone of $12/10.


FB, daily

Summary

FB remains a great unknown, its going to take a few more quarters of earnings just to have any real idea how they are coping as a listed company - with the inherent pressures, especially on the CEO.

The MACD cycle is again rolling over, and we're only day'1 down, so..FB could easily be in the 16/14 range by the end of September.

The original 'market zone' target of 12/10 does indeed look set to be hit this Autumn.

My 'fair value' of $4 won't be hit of course, after all, this market simply won't allow true 'fair value' in most cases. Yet, even $12/10 would be a real achievement for the bears who have been shorting since the 30s.

If the SP' can somehow - at least briefly, sink to the low 1200s this Autumn, then FB will indeed hit the 12/10 zone.

AAPL - failed breakout ?

Apple (AAPL) suffered a moderately weak day, falling $9.70 to around $663, a fall of 1.4%.


AAPL, daily

Summary

First downside target is old resistance of 640/45, that seems viable at any time, even as early as tomorrow - if the Bernanke upsets the market with his hole speech.

Secondary target is the 620/600 zone. It would seem very difficult for AAPL to break below this level in the near term.

AAPL remains very cheap relative to the main market, and it remains very amusing how so many are still fixated about the nominal stock price, rather than the actual price/earnings valution.

A clear near term sell, but long term, the trend remains starkly upward.

AMZN - incredibly overvalued

Amazon (AMZN) the online retailer closed up another $2 today, truly incredible. It has cruised comfortably higher despite lousy earnings for Q2.


AMZN, daily

Summary

First, check the AMZN key stats, via yahoo

Forward P/E - assuming earnings (and the economy) hold together, is still over 100. That is INSANE, and even a dynamic and profitable company would be hard to justify 50. So, first.....the stock price should be cut in half..all else being unchanged.

My fair value for AMZN remains around $100...the minimum downside target. However, if AMZN fails to rationalise itself, improve efficiency, then fair value is considerably lower.

Worse case, if the economy does slip into recession, fair value is arguably somewhere between 60 and 20.


As ever, its all in the timing

The problem remains for those wanting to short - just as was the case with NLFX, CMG, GMCR, timing. How many more months will the market tolerate the current delusional rating?

It could easily be into 2013, and if the broad market holds together, AMZN could be over $300 by then.

At some point, reality will hit this stock, and the clown networks will be '...no one saw this coming'.

The only issue is indeed...when.