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by Darius Anucauskas

Facebook Stock Could Be Showing Signs of Weakness

As we know, yesterday, the equity markets took a hit and sold off sharply. The Facebook stock (NASDAQ: FB) was one of those that felt the heat as well. FB is traded on the Nasdaq Composite and has around 5% weight on the whole capitalization of the index. It is also one of the top technology company stocks that is carefully monitored, when analysing the US technological sector as a whole. From the technical side, the stock broke and closed below its medium-term upside support line drawn from the low of December 21st. The price found good support at the 180.75 hurdle, marked near the highs of April 15th and 17th. For now, we remain somewhat bearish over the short-term outlook, but we will wait for a break below yesterday’s low first, before examining slightly lower areas.

A drop below the 180.75 support zone could open the door for further slides. Such a move might drag the price towards the 174.07 area, which was the highest point of March and the low of April 8th. If there are still no takers of FB even at that level, this might hit the stock again and the share price could slide towards the 169.54 barrier, marked by the intraday swing high of March 26th. Also, this is where FB could meet its 200-day EMA.

Our oscillators are painting a somewhat gloomy picture, at the moment. The RSI has moved away from its highs, crossed below 50 and continues to point to the downside. The MACD is also pointing to the downside and is already running below the trigger line. Both indicators are in support of the above-discussed idea.

On the other hand, if by any chance, FB reverses and moves back above the aforementioned upside line, this could once again raise investor interest in the stock, especially if the share price travels above the 189.40 level. That level is marked near the lows of April 26th, May 2nd and acted as good resistance on May 10th. This is when more investors could take this as a good sign and jump into the stock, potentially lifting the price to the 196.15 zone, or even the 198.40 barrier. That barrier was the highest point of April.   

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