From the beginning of the month, the Facebook Inc. stock (NASDAQ: FB) was moving higher, trading above its steep upside support line drawn from the low of June 4th. But that lasted until the share price found resistance near the 194.00 barrier, which held it strongly and forced FB to reverse back down south. The move led to a break of the previously-mentioned upside line, opening the door to a possible further decline. For now, we will take a somewhat bearish approach and target slightly lower areas, at least in the short run.
If the stock continues to slide and moves below the 21 EMA, we will aim for the next potential support zone, at 184.55, marked by the high of May 29th and the low of June 19th. We might see the price rebounding from there, but as long as it stays below the 188.05 zone, we will continue targeting the downside. If there are still no takers of the stock around there, FB might drop again, eventually bypassing the 184.55 hurdle and moving to its other possible support level, at 181.75. That level marks the high of June 14th. With such a move the stock would fill the gap created between June 14th and 15th.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed scenario. The RSI had recently topped and shifted to the downside, where it continues to point lower. The MACD also topped and moved below the trigger line. The indicator is also pointing to the downside but remains in the positive territory.
In order to start considering the upside again, we would need to see a break of a newly-established short-term tentative downside line taken from the high of April 25th and a push above the 194.00 barrier, marked by the high of June 24th. This way, the stock could move a bit higher, to test its next resistance area at 196.15, marked by the high of May 3rd. If investors do not see it as an obstacle, FB might continue drifting north, aiming for the 198.40 barrier, which is the highest point of April.
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