Technical Analysis – Facebook leaves virus sell-off behind; hits fresh record highs


Christina Parthenidou, XM Investment Research Desk

Facebook stock opened at fresh record highs on Wednesday and ran as high as 231.24, successfully recovering February’s virus-led downtrend that bottomed at a 14-month low in mid-March.

The short-term bias is now viewed as cautiously positive as the price has pierced the upper Bollinger band, while the RSI has entered the overbought territory, both suggesting that room for improvement may be limited.

Another leg up could stall somewhere between the 240.00 and 250.00 psychological marks.

On the other hand, a downside reversal may retest the 222.50 former resistance area, where any break lower could strengthen selling pressure towards the 213.00 barrier. Moving lower, traders may expect a steeper decline to emerge below the middle Bollinger band currently around 204.00, with the 200-day simple moving average (SMA) coming next under the spotlight.

Summarizing, the social-media giant continues to look positive after reaching all-time highs, though downside corrections cannot be ruled out as its stock seems to be hovering within overbought zone.