It's been an interesting year for Facebook (FB). While I've made it no secret that I'm not a big fan of the social networking stock, shares have posted some impressive performance in the short-term, climbing more than 21% in the last six months. If only that put a dent in the 30% that shares are still down from their IPO last summer.
Now, after its latest upward correction, Facebook is looking bearish again. That's thanks to a head and shoulders top that's been forming in shares since mid-November. The head and shoulders is a price pattern that indicates exhaustion among buyers. The pattern is formed by two swing highs that top out around the same level (the shoulders), separated by a bigger peak called the head; the sell signal comes on the breakdown below the pattern's "neckline" level, currently right below $26.50.In other words, it's make or break time for Facebook right now -- this stock is perilously close to triggering a sell. It looks like we'll see a rebound from yesterday's dip in today's session, which should spare shares from triggering Tuesday, but I'd still recommend keeping a very close eye on this name. When and if it does trigger, I'd recommend setting a protective stop just above the 50-day moving average.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV