Facebook ( FB) – Get Report was hammered on Friday, falling more than 8%. On Monday the selling pressure continued, with shares down about 1%, although bulls had the ability to bid shares up off the lows up until now.
The more comprehensive market decline over the previous couple of sessions hasn’t helped matters. However, Facebook is under such heavy pressure as more companies begin to boycott its marketing platforms in July.
Up until now, some of the boycotting companies consist of Ben & Jerry’s, Coca-Cola ( KO) – Get Report, Starbucks ( SBUX) – Get Report and Honda ( HMC) – Get Report In overall, more than 160 companies are involved
Trading Facebook Stock
Friday’s loss was an avalanche of high-volume selling, with Facebook stock breaking listed below $225 This mark was considerable. It was resistance in January and support in May and June.
Once support gave way, the stock traded down to the 50- day moving average, prior to gapping listed below this mark on Monday early morning. Trying to recover this metric now, it will be intriguing to see whether it acts as resistance.
If it does, it puts the $200 mark in play. Not just is this level mentally pertinent, but it was also post-earnings assistance in late-April and May. Even more, the 100- day and 200- day moving averages are near $198
This should make the $200 location a strong support zone if Facebook stock declines that far. It might a minimum of benefit a buy-the-dip bounce trade.
On the other side, let’s say Facebook recovers the 50- day moving average. It then puts the $225 level back in play. It would be rather bullish to see Facebook stock recover this mark.
It puts the 20- day moving average back on the table– currently near $230– followed by resistance at $240
For now, I would choose a wait-and-see technique with Facebook stock. That is, wait to see whether it can recover $225 or if it dips to $200, then attack.