Facebook Shares Test Long-Term Channel Resistance

Facebook Shares Test Long-Term Channel Resistance

Facebook Shares Test Long-Term Channel Resistance

Facebook shares made a strong rally in yesterday’s New York trading session, thanks to the rollout of the company’s newest features. During the Cannes Lions Festival, Facebook announced its new interactive mobile ad format that could potentially draw record revenues for the social media platform.

Price is hovering close to $88/share and may be due for a bit of profit-taking, which might allow the top of the channel to hold as resistance. A strong pullback could trigger a move towards the channel support at $80/share before the rally resumes. Then again, sustained buying momentum today might push for a break past the top of the channel.

Stochastic is in the overbought region, suggesting that buying pressure is weakening. RSI is also reflecting overbought conditions, which also confirm the possibility of profit-taking and a quick pullback. Note that the short-term 100 SMA is still above the longer-term 200 SMA, which means that the uptrend is likely to stay intact.

Facebook Shares Outlook

Facebook shares are now at their all-time highs after Facebook Chief Product Officer Chris Cox shared how the mobile ads will blend seamlessly in the user’s feed and can feature faster load times. He added that 73% of the company’s revenue comes from mobile ads, which means that these new features could potentially increase profits later on.

Apart from that, investors also noticed the fact that Facebook’s market value officially surpassed retail giant Walmart, replacing it in the top 10 of the S&P 500’s most valuable companies. Facebook shares have risen more than 34 percent this year and the company was valued at $238 billion after trading Tuesday; Walmart was at $234 billion.

In addition, Facebook shares also got a boost from the announcement that the company would introduce all of its ad-targeting tools to Instagram, which has around 300 million users at the moment, adding to potential sources of growth and revenue.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com