While the Nasdaq did not fare very well on Monday either, Facebook hit particularly hard. It wasn’t just because of the overall selling in the market, either.
Next, the company’s platforms — Facebook, Instagram and WhatsApp — were hit with long outages throughout Monday.
Both catalysts combined to weigh on the stock on a day where sentiment was already low.
The action also weighed on Twitter (TWTR) - Get Twitter, Inc. Report, Snap (SNAP) - Get Snap, Inc. Class A Report and Pinterest (PINS) - Get Pinterest, Inc. Class A Report, all three of which closed lower on Monday.
Trading Facebook Stock
Even before this week, Facebook has been enduring a painful correction. Shares have fallen in three straight weeks coming into Monday and in nine of the past 14 sessions.
When Facebook stock gapped down on Monday, many investors had their eye on the 200-day moving average. However, many weren’t paying attention to the 10-month moving average near $325.
This level ultimately held as support, at least for a day.
With Tuesday’s gain, Facebook is giving bulls an inside day. Meaning that today’s entire range is contained within Monday’s range — so far.
Aggressive bulls may be long Facebook stock now, looking for a push higher. If they get it, let’s see if the stock can reclaim the September low at $338.15, followed by the 10-day moving average.
If it can do that, $350 is on the table.
On the downside, a drop below Monday’s low at $322.70 that’s not quickly reclaimed opens the door to the 200-day moving average.
For more conservative bulls, let’s see if an inside day is confirmed. If so, they can opt to trade a break of Tuesday’s range (its high or its low) and look for a continuation in that direction.
Lastly, the overall market will likely play a role in Facebook stock as well. Further selling pressure in tech will not likely bode well for this name.