Technical Analysis – Facebook slips near 50-day SMA; holds in narrow range in near term


Melina Deltas, XM Investment Research Desk

Facebook stock price pulled back from the seven-month high of 174.29, registered on March 11, resting slightly above the 50-day simple moving average (SMA) and the 38.2% Fibonacci retracement level of the downleg from 218.44 to 123.30, around 160.00. The price has been developing within a narrow range after the jump above the 38.2% Fibonacci over the last one-and-a-half months.

Technically, the stochastic is detecting downside momentum as it is approaching the oversold zone, while the MACD is losing momentum below its trigger line in the positive territory.

Another wave of losses could stop at the 156.00 support barrier beneath the 50-SMA and if bearish pressures fail to halt above this line, the market could open the door for the 152.00 obstacle. Even lower the 23.6% Fibonacci region near 145.74 could come into view.

On the other side, upside recovery in the stock may encounter immediate resistance near the 200-day SMA, currently at 165.00 before driving the market until the 50.0% Fibonacci of 170.82. The next resistance is coming from the seven-month high of 174.29, while more gains could shift the neutral bias to a more bullish one in the near term.

Concluding, the market remains in a positive mode after the upward movement from the two-year low of 123.30 in the short term, despite the latest sideways move.