Technical Analysis – Facebook stock consolidates, cautiously positive in medium term


Marios Hadjikyriacos, XM Investment Research Desk

Facebook’s stock has been trapped within a sideways range between 193.0 and 176.50 since early August, painting a neutral outlook in the short term. A break in either direction could therefore determine the bias. Overall, the structure of higher peaks and higher troughs is still in play on the daily chart, keeping the bigger picture positive for now, though a break below 161.0 would bring that into doubt.

Momentum oscillators support the notion that the short-term bias is flat. The RSI is just below 50 and pointing up, while the MACD is both near its zero and trigger lines.

Another wave of declines in the stock could meet support near the lower bound of the range at 176.50, which is also near the 200-day simple moving average (SMA), currently at 174.40. If the bears claw their way below that zone, the next obstacle would be the 161.0 area, where another break lower would turn the bigger picture to neutral, from cautiously positive now.

On the upside, a move above the 50-day SMA and the upper bound of the range at 193.0 could see the bulls aim for the July peak of 208.0. If they overcome that too, that would turn the broader outlook back to firmly positive, opening the way for the all-time high of 218.50.

In brief, a clear break either above 193.0 or below 176.50 is required to set the near-term bias.