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How Facebook Stock Can Run to Highs and Hit $400

Facebook stock has traded quite well. It's now consolidating, so let's look at the charts to see how the shares can rotate to highs.

We’re getting some choppy price action to start the week, with the stock market gapping higher and rolling over out of the gate.

The S&P 500 has declined for five sessions, and if the bulls aren't careful, Monday could make it six. \

But if you look at social-media giant Facebook  (FB) - Get Facebook, Inc. Class A Report, you’d hardly know that the market is stumbling.

The stock remains a hair off its all-time high at $384.33, while it continues to sport a market cap north of $1 trillion.

Currently, all the FAANG components except for Netflix  (NFLX) - Get Netflix, Inc. (NFLX) Report are in the trillion-dollar club. That said, Netflix has been trading quite well lately.

An antitrust lawsuit in New Zealand isn’t doing much to scare the Facebook bulls, nor did a $267 million fine in Ireland.

Despite some negative developments, Facebook stock continues to chug higher. Are new all-time highs in order?

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Trading Facebook Stock

Daily chart of Facebook stock.

Daily chart of Facebook stock.

Facebook stock ripped to all-time highs earlier this month. After that impressive push, the shares put in an inside week last week.

While the S&P 500 is still within 2% of the all-time high, many individual stocks are performing much worse. Not Facebook, though.

That inside week after a solid rally could act as a consolidation phase, setting Facebook stock up for another push to the upside.

Aggressive longs may consider buying Monday’s dip down into uptrend support and the 10-day moving average. However, keep last week’s low in mind at $373.15.

A drop below this level that isn’t quickly reclaimed could set up Facebook for a weekly-down rotation, potentially putting the 10-week and 50-day moving averages in play near $365.

On the flip side, let’s see if Facebook can hold current levels and rotate over the $385 area. If the market gets any sort of relief rally in the next few days, Facebook could certainly enjoy some strength.

Over $385 puts Facebook at new highs and opens the door to the $396 to $401 area. There it finds the 161.8% extension of the current range and the 261.8% extension of the longer-term range.

In either scenario, keep the rotations in mind. Above $385 is bullish and below $373 could open the door to a fresh buy-the-dip opportunity.