Facebook finds support near an uptrend line
|Facebook (NASDAQ: FB) traded somewhat higher on Tuesday, after it hit support near the 263.00 zone on Friday, slightly above the uptrend line drawn from the low of March 18th, as well as near the 50-day EMA. As long as the stock is trading above that upside line and above all three of our moving averages on the daily chart, we would consider the near-term outlook to be positive and we will class the slide initiated on September 3rd as a corrective phase.
If the bulls are strong enough to take the reins again today, we could see them targeting the 291.00 area soon. That area is marked as a resistance by the inside swing lows of August 28th and 31st. If they don’t stop there, the next target may be the stock’s all-time high, at 304.65, hit on August 26th. Another run higher will take FB into unchartered territory, and thus, with no prior peaks and troughs to mark new resistance levels, we will consider as a potential key hurdle, the psychological zone of 350.00.
Shifting attention to our daily momentum studies, we see that the RSI turned up and just poked its nose above its 50 line, while the MACD, although below its trigger line, stands within its positive territory and shows signs that it could also turn up. Both indicators suggest that the stock may start picking upside speed soon, which supports the notion for another round of buying.
In order to abandon the bullish case, we would like to see Facebook falling below the 263.00 zone. This may also take the price below the aforementioned uptrend line and may initially trigger declines towards the lows of August 4th and 5th, at around 247.00. Another break, below 247.00, may allow the slide to extend towards the 227.00 territory, marked as a support by the low of July 24th.
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