Like many mega-cap tech holdings, the stock erupted higher in late August before peaking and trending sideways. Is that consolidation about to resolve higher?
Over the last month though, Facebook is actually the top performer, now up almost 4%. While it doesn’t sound too impressive, it compares to the next-best performer, which is Alphabet at down 3%.
In fact, Facebook stock has been rallying pretty hard since Jim Cramer said to buy tech stocks earlier this month.
Let’s look at Facebook as the stock starts to perk up a bit.
The company's been busy with decisions related to its platform and COVID-19, as well as making new deals with Australian publications. However, a look at the daily chart emphasizes the multi-month chop and consolidation I referenced at the top of the story.
Last week, shares tried to break out over downtrend resistance, but ultimately failed as Facebook stock topped out at $277.90. Monday’s attempt was also stymied by downtrend resistance.
However, the sellers couldn’t keep bulls in check forever. Shares eventually burst through downtrend trend resistance earlier this week, while also giving bulls a weekly-up rotation over $277.90.
Incidentally, Facebook stock went monthly-up as well, clearing the February high at $276.60.
On the downside, I really want to see Facebook hold the $276.50 to $278 area to keep these rotations intact. Further, I want to see the stock hold up over the 10-day and 100-day moving averages.
As it tussles with the 61.8% retracement, keep an eye on the January high at $286.79.
If the stock can clear that mark and make new 2021 highs, then $290-plus is possible, ultimately putting $300 in play, as well as the 52-week high up at $304.67.
Despite the sleepy nature of the FAANG stocks over the last few months, Facebook looks to be waking up. That starts to change on a move back below $276. But for now, let’s see if the stock can gain more momentum.