Facebook Inc (FB): Buying This Tech’s Breakout Could Mean 10%-Plus Gains by Year-End

The next major resistance level is the IPO all-time high of $45, which is about 11% above current prices. However, with no historical resistance in sight, FB could go much higher.

The bullish technical outlook is supported by strong fundamentals.

With an expected continued increase in mobile advertising, analysts project total revenue will grow 49% in the third quarter, hitting $1.88 billion compared to $1.26 billion in the year-earlier period. For the full 2013 year, analysts expect revenue to increase 44% to $7.32 billion from $5.09 billion last year.

The earnings outlook is equally solid. Analysts estimate Q3 earnings will increase 50% to $0.18 per share from $0.12 in the comparable year-ago period. And full-year 2013 earnings are expected to rise 34% to $0.71 per share from $0.53 last year.

Risks to consider: The overall market, as represented by the S&P 500, is showing some signs of toppiness. But FB just broke a key resistance area and looks set to move higher.

Recommended Trade Setup:

— Buy FB at the market price
— Set stop-loss at $35.98, slightly below a small shelf of nearby support
— Set price target at $44.97, just below the projected target of $45, for a potential 11% gain by year’s end

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