Facebook Shares Testing Rising Channel Support

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Facebook Shares Testing Rising Channel Support

Facebook Shares Testing Rising Channel Support

Facebook shares sold off sharply recently as risk aversion returned to the markets. However, price is testing the long-term support on the rising channel visible on the daily and 4-hour time frames.

In addition, a bullish divergence can be seen since stochastic made lower lows while price made higher lows. This suggests that a bounce is in order, at least until the middle of the channel

The 100 SMA is above the 200 SMA, confirming that the path of least resistance is to the upside and that the rally could continue. Price could even make it all the way back up to the rising channel resistance at $118-120/share.

RSI and stochastic appear to be turning higher so a pickup in bullish pressure might take place. If not, a break below the channel support at $96/share could be seen, taking Facebook shares on a stronger selloff.

The next potential floor is located around $85/share, at which sellers might book profits off their trades. However, if bearish pressure stays in play, further declines to the next support at $80/share might be seen.

India’s regulators recently ruled that the company’s Free Basic services violate the principles of net neutrality, reducing the potential market of Facebook’s social media platform. Free Basics is an initiative aimed to connect the part of the world that isn’t connected to the Internet, offering users access to a limited number of websites, including content like selected local news and weather forecasts.

According to the Telecom Regulatory Authority of Indiathe ban isn’t specifically targeting Facebook’s services but applies to free mobile data programs that favor some Internet services over others.

“While we’re disappointed with today’s decision, I want to personally communicate that we are committed to keep working to break down barriers to connectivity in India and around the world,” said Facebook CEO Mark Zuckerberg in a post.

 

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

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.