Chaos Clinic for 2/14/2020
Facebook may be vulnerable to a major downturn. This two year 8 hour bar chart shows that it has formed a rising wedge. While the 36 day trend is up, it has flattened after a sharp drop on 1/31/2020. The drop broke back below the 216 level of prior tops.
That drop came from a price of 225, which is a harmonic 5/8 of a 360 degree circle. Previous highs in 2018 and mid 2019 were from 216, the 3/5th part of the circle. Support came in in late 2019 loosely around 180, 1/2 a circle.
The second half of 2018 saw Facebook drop from 219 to 124 in 174 calendar days. a 43% drop in less than 6 months, of -5.3 points per day.. The ensuing rally of 101 points took 401 days, about 4 points per day. The slower rally speed
suggests less energy.
Trendlines along the highs and the lows outline the rising wedge. Trading is now trapped in the small end of the wedge. Prices may congest within it into June. But if prices break down below the bottom trendline, a serious decline could occur. This looks like a trade setup to watch.
This content was published on Dr. Al Larson's Chaos Clinic which you can attend each Friday for free.
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Information on this page contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions.