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by Charalambos Pissouros

Facebook Flirts with Uncharted Territory

Facebook Inc. (NASDAQ:FB) has received harsh press recently, including allegations over employees’ treatment and its unwillingness to take measures against hate speech and fake news. Various upsets have let to boycotts, lost sponsorships and other consequences. Having said that though, Facebook has kept marching higher, perhaps boosted by the coronavirus pandemic, which prompted citizens locked at home to increase their online activity. Despite the upsets, on July 30th, the company reported better-than-expected second quarter results, which resulted in a positive gap in the stock and a record peak on August 7th, at around 279.00.

From the more technical side, the stock continues to print higher highs and higher lows above the uptrend line drawn from the low of March 18th, while yesterday, its advance was stopped fractionally below its record. Bearing also in mind that the stock is trading above all three of our moving averages on the 4-hour chart, we would consider the near-term outlook to be positive.

A clear and decisive move above 279.00 would take the share price into uncharted territory, and thus, with no prior peaks and troughs to mark resistance lines, we will consider as a potential upcoming hurdle the psychological zone of 300.00. Even if the stock moves lower, back below 265.00, as long as it stays above the aforementioned upside line, we will consider the retreat as a corrective move within the broader uptrend.

Looking at our short-term oscillators, we see that the RSI lies slightly below 70 but points up, while the MACD, already positive, has just crossed above its trigger line. Both indicators suggest that the price may already have the necessary momentum to push for a new record in the days to come.

Now, in order to start examining the bearish case, we would like to see the stock sliding below the 247.00 barrier. Such a move would also drive the price below the pre-mentioned uptrend line and may open the path towards the 235.00 or 227.00 price-tags. If investors are willing to allow the slide to continue, the next support may be seen at 207.00, marked by the low of June 29th.

Facebook 4-hour chart technical analysis


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