Facebook Stock News and Forecast: Why was FB down today?

Facebook (FB) was trending heavily on social media on Monday. The only problem was that it was trending on competitor social media sites as Facebook was suffering some serious issues. Initial reports started coming out around midday New York time (5 pm London) that Facebook and related sites WhatsApp and Instagram were having problems. The outage varied from region to region, but it appears to have lasted for nearly six hours. Downdetector, which is a website monitoring company, said it was the largest failure it had ever seen with 10.6 million problem reports worldwide, according to Reuters. While the issue appears to be largely fixed now, Downdetector is still reporting issues for Facebook and Instagram this morning, but these may be legacy issues rather than anything new. 

Facebook stock obviously took the news extremely badly, and the stock cratered for most of the session. Eventually closing down just under 5% at $362.23. The stock market has not been having an easy time as it is, and Apple fell over 2% on Monday, so not all of the fall can be attributed to just the downtime. At the time of writing, Facebook shares are up about 2% in their Frankfurt listing. 

Facebook key statistics

Market Cap	$967 billion
Enterprise Value	$948 billion
Price/Earnings (P/E)	25
Price/Book	8
Price/Sales	12
Gross Margin	80%
Net Margin	37%
EBITDA	$52 billion
52 week low	$244.61
52 week high	$384.33
Average Wall Street rating and price target	Buy $417.62

Facebook (FB) stock news

According to Reuters, the offline issue lasted until 5.45pm EST when users of Facebook began getting back online, but WhatsApp still had problems. As of this morning, Facebook says services are back online, and it is working to restore them to regular operations. The cause, according to Facebook, was faulty configuration changes on its routers. "Our engineering teams have learned that configuration changes on the backbone routers that coordinate network traffic between our data centers caused issues that interrupted this communication," Facebook said in a blog post. 

This news was not helpful to the stock, which had already been on the back foot due to bears being in control of recent stock market moves, especially in the Nasdaq. Also, a Facebook whistleblower, Frances Haugen, is due to speak before US lawmakers on Tuesday, so the stock will remain in the headlights of traders with strong news flow over the next few sessions. 

Facebook (FB) stock forecast

Ignoring the noise then and turning our attention to the clarity of the chart should give us clues as to how to trade this one and its possible future direction. Clearly, we have established the recent news flow is bearish, and this is pretty clear from the chart as well. It is the power of this recent move in Facebook that is most staggering. When trying to follow a trend or establish what is the dominant trend, it is important to look at the size of the candles. We can see the red down days are long, and any recent green candles are short. So bears are clearly in control and not done yet. While today may see some reprieve with a dead cat bounce due to services being back online, the trend is still strongly bearish. 

$338 would be our first resistance where we can try to wait to go short again. Breaking that would put Facebook back into neutral in our view. The obvious buy-the-dip support is at $315 where volume is strong and the yearly Volume Weighted Average Price (VWAP) sits alongside the 200-day moving average.

FXStreet View: Bearish, neutral above $338.

FXStreet Ideas: Buy the dip here below $330 for a quick scalping trade and consider exiting most at $338. The Relative Strength Index (RSI) is now oversold, so hence a quick scalp buy, but overall we remain bearish for now.