Boston, MA 10/07/2014 (wallstreetpr) – Facebook Inc (NASDAQ:FB) (Closed: 77.56, Up: 0.15%) had the second consecutive narrow range day after the sharp drop last week from the 2014 high of $79.71. It seems from the price action that the market remains indecisive about the stock at the current level. Some report is circulating in the market about the company getting paid about $2 billion from fake “Like” spammers but the closing of the Whatsapp deal resulting in a payment of 177 million unrestricted shares of Facebook Inc (NASDAQ:FB) may counter that with some serious selling pressure. The volume pattern doesn’t give any clue as the Monday volume of 25.7 million was way lower than the average volume of 36.6 million.
Technically, a trendline support is seen at $76 levels but the probability of that holding up may not be that certain. The last part of the rally from the September low of $73.07 to $79.71 took the form of a Rising Wedge, which generally signals the end of a move of a higher degree and the next move usually targets the beginning point of the move. If we take that signal, then the price may target $73 in the coming sessions, at least the lower end of the two-month range of $74-$80 may be tested.
The bulls may argue that the longer term trend remains big time bullish as the stock is trading only 2.70% lower than the life high, not only the 52-week or year high. So if the trendline support at $76 manages to hold and provide support this week, the bulls may still keep the game in their favor with a sudden burst of momentum on the upside.
Also to be considered is the 50 day moving average that has been supporting Facebook Inc (NASDAQ:FB) on any dip since May 2014 and currently stands at $75.60. So the prudent step may be to stay long and not think of any shorts.
