April Pullback Retracement Play in Facebook FB

Apr 1, 2014: 1:52 PM CST

Facebook (FB) shares face a major “make or break” support challenge at a key opportunity level for traders.

Let’s set the chart up to plan a potential “support bounce” or “alternate trend reversal breakdown” play for FB.

We’ll start with the broader Weekly Chart for a top-level reference:

Facebook FB Weekly Chart Technical Analysis Trades

We see a strong uptrend took shares from the $25.00 per share level in 2013 to the recent 2014 peak above $70.00 per share.

A weekly chart or steep retracement (sell-swing) took price to the potential support of the rising 20 week EMA into $60.00 per share ($59.80 at this moment).

That’s where we’ll focus our attention as we plan a potential support-bounce play off this level.

Keep in mind that a failure or immediate breakdown under the $60.00  per share level opens a downside pathway toward $50.00 per share as an “alternate breakdown” thesis.

The Daily Chart reminds us why $58.00 and $60.00 are the current focal prices:

Facebook FB Daily Chart Fibonacci Support

We’ll start with the small “triple top” or horizontal resistance through January 2014.

Next, we’ll incorporate the rising 20 week EMA (near $60) with the 50.0% Fibonacci or “halfway point” of the November to March recent rally ($58.00).

Note the spike reversal candle develop from the underside of this pivot level.

It’s simplified analysis/strategy, but we’ll look for a continuation “support bounce” play up into the 20/50 day EMA cross-over level near $64.00 for an initial target, and then a breakout through EMA resistance to open a target pathway toward the $72.00 divergent high from earlier in March.

Keep these simple yet overlapping levels in mind when planning trades in Facebook (FB) stock.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “April Pullback Retracement Play in Facebook FB”

  1. Jesse Nash Says:

    You focus so much on the down side it makes me think you are biased and thirsty for a $50-$55 trade. You had your chance at $57.98. Give it up with all this technical mumbo jumbo. Technicals can bite you on the ass as today's action proves. Good luck.

  2. Corey Rosenbloom, CMT Says:

    I'm focusing neither on the bull or bear side but the possible inflection or pivot price as highlighted. Try to remain objective.