Analysis and Opinion »

Facebook Inc. holds in a tight range; strong bullish above 77.00!

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Facebook Inc. (NASDAQ:FB) is continuing to look bullish on the daily chart, after finding strong support around the 70.50 – where the ascending trend line dating back to November 2013 intersected the 23.6% Fibonacci level – on the previous month. From there, it broke above all-time highs earlier on in the session (81.21) but has since lost some of the momentum, dropping below 76.80, which includes the 50-period SMA on the daily chart.

Currently, the Facebook stock is consolidating above the ascending trend line and the strong support levels of 70.50 and 72.65. On the upside and remaining on the daily chart the stock is finding strong resistance form the 50-period SMA and the 76.80 level. If, as expected, we see a break above here, the next target will be the 79.68 level, followed by 81.21, all-time highs and previous level of resistance.

If, on the other hand it breaks below here, it could result in a non-failure swing on the daily chart, which would suggest we may see another attempt to break below the key support level of 70.50 (neckline). A decisive break below the latter level, then I would start looking for a trend reversal and a pattern structure, with the 67.00 level to be a significant level of support. In addition, the 200-period SMA is ready to provide a significant support around the 67.00 level in case of a pull back.

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