Facebook Shares Ready to Test Range Support Again?

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Facebook Shares Ready to Test Range Support Again?

Facebook Shares Ready to Test Range Support Again?

Facebook shares seem to have found resistance at the top of its current range once more, as price failed to break past the $81/share level. Price could head back towards range support around the $74/share level.

For now, the 50 simple moving average is moving above the 200 SMA, indicating that the uptrend could resume at some point. However, MACD seems to be indicating a potential drop in buying momentum, which could lead to a short-term pullback for Facebook shares.

Facebook Shares Outlook

US equities have been mostly ranging lately as risk appetite has flipped on and off lately. Speculations of a Fed rate hike have supported Facebook shares in the past but Fed head Yellen recently downplayed this possibility. This lead to profit-taking among some US equities and kept FB shares in range.

A short-term selloff could lead to a test of the support at $74/share, which might still hold as a floor for any losses. Upcoming data from the US economy could continue to drive equity price action in this trading week.

One of the major event risks is the core PCE price index, which is the Fed’s preferred measure of inflation. Along with this, data on personal spending and income are due, which might be crucial for the outlook of the US economy and companies. Also lined up for the week is the NFP figure, which might indicate another strong gain in employment.

If these reports disappoint, US equities might be forced to return most of their gains, as this could mean a potential downturn in economic activity. Facebook recently announced a pickup in advertising activity on its sites, which might mean more revenue for the company. However, investors are still wary that the company could be able to monetize its latest acquisitions, leading to doubts on profitability.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com

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Jonathan Millet is currently the proud CEO of ForexMinute.com, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers. He also holds the position of Binary Options Consultant at ForexMinute.com. Before ForexMinute.com was around, Jonathan was a successful Forex dealer and chief market analyst at Forexyard. He has also worked as a Forex trader. His other specialties include advising financial companies of how to stay head of the competition.