I am surprised it took Facebook stock this long to rally. With the rest of the social media space up notably, it’s going to be a surprise if Facebook’s numbers aren’t strong.
Wednesday’s decline was an ugly one. Shares fell 5.5% and barely closed above the lows. Facebook stock also broke below the 50-day moving average amid that decline.
However, it’s now snapping back to the upside, as it starts to press into the $285 resistance level ahead of earnings. If the reaction is bullish, look for a move over $285 and for a test into the $300 to $304 range.
In late August and early September, Facebook twice tried to push through this area. It couldn’t do so though, pulling back to the $250 area.
Bulls would like to see Facebook stock retest this resistance area, but they would love to see shares break out over it. If it does, the two-times range extension near $311 becomes the next upside target.
At this point — with Snap and Pinterest showing strong post-earnings gains — it would be rather disappointing to see Facebook report a lackluster quarter.
If it does though, keep an eye on this week’s low. If shares close below $267.26, Facebook stock will have lost the 50-day moving average and uptrend support (blue line).
That will leave its 100-day moving average in play, as well as its recent support range in the $247 to $250 area.