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Time to 'Friend' Facebook

Stocks in this article: FB UNTD SLH RAX

Rackspace Hosting has a financial strength of B++ and is rated B by TheStreet. The high P/E ratio of 96 is paired with revenue predicted to increase by 26.30% next year and earnings to increase annually by 29.13% for five years.

Conclusion: Facebook is the market leader in innovation and attracting viewers. Over a billion people agree and have signed up. The revenue model is still to be proven and cost containment is essential.

From this point on Facebook is playing with other peoples' money and stockholders will expect expenditures to have a cost benefit relationship. I'm not sure how high the price will go but I think if you look at this chart and compare the moving averages and turtle channels you will conclude the bottom now has support.

From here on out it will be revenue and earnings that will drive the price and not hype. This is still a speculative issue and you should watch the support levels if you buy:

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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