Apple (AAPL) - Get Apple Inc. Report stock is up a similar amount following earnings. Both FAANG components are edging higher on the day, but neither is exploding to the upside. For Facebook stock, the company's third-quarter earnings were good enough to trigger a breakout over a notable resistance level.
However, that breakout will fail should the stock close below it. That would be a potentially bearish development and could indicate that shares are heading lower in the short to intermediate term.
Investors are likely frustrated by the lack of upside follow-through, as Facebook reported a pretty solid result. The company delivered an earnings and revenue beat, with the latter growing more than 28% year over year. With solid user growth and a strong balance sheet, investors feel pretty confident after the quarter.
So why isn't the stock moving all that much? Let's look at the charts.
Trading Facebook Stock
In mid-October, Facebook stock was rejected from the $190 level, while the 78.6% retracement comes into play near $190.30. After consolidating for several weeks below this mark, FB stock did a solid job of holding its 50-day moving average and uptrend support.
After its post-earnings rally on Thursday, Facebook stock finally vaulted the $190 mark. But as we said before, should it fail to hold this mark, the breakout attempt will be in severe jeopardy.
If FB stock is able to stay over this mark, a post-earnings rally could continue. In this case, investors will first need to see shares reclaim $193.10, the September high. Above that and Thursday's highs are the next upside target, at $198.09. From there $200+ is possible.
Should $190 fail to hold as support, investors will have to rely on the 50-day and 100-day moving averages to buoy Facebook, as well as uptrend support (blue line). Below those marks and the 200-day moving average is possible, at $180.29. Below that and the 61.8% retracement is a possible downside mark.
Keep it simple: Above $190 is constructive, below not so much.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.