Technical Analysis – Facebook breaks the lower bound of a range
Facebook has been trading in a sliding mode since September 13, when it broke the key support – now turned into resistance – hurdle of 154, which acted as the lower bound of a sideways range that had been in place since June 10. Combined with the fact that the bigger trend remains to the downside, the break below the floor of the shorter-term range may have turned the outlook bearish again.
Our daily oscillators add credence to the notion of further declines, with the RSI lying near its 30 line and pointing down, and the MACD running below both its zero and trigger lines, pointing south as well.
The next stop for this stock may be at around 137, a support marked by the low of March 18, 2020, the break of which could carry declines towards the low of December 21, 2018, at 123. If there are no investors to pick up shares near that zone either, then the downtrend may stretch towards the 114 area, which acted as a floor back in November and December 2016.
On the upside, a break above the upper bound of the aforementioned range at 183 may be needed for the picture to start becoming brighter. Should this be the case, investors may push the action towards the high of June 8 at 201, and if they refuse to liquidate there, they could continue their parade towards the 224 territory, marked by the high of May 4.
To recap, Facebook had been trading in a sideways range since June 10, but on September 13, it slipped below the lower boundary, perhaps signaling the continuation of the bigger downtrend.
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