Facebook stock has been moving sideways on its daily time frame, but the trend has slightly been higher. In fact, a rising channel can be drawn to connect the recent highs and lows since the end of October last year.
Price has just tested the resistance around $82/share and is moving back towards the bottom of the range for another potential bounce. MACD is pointing down, indicating that selling pressure is in play. RSI is on middle ground and barely offering clear clues at the moment.
Facebook Stock Forecast
The 50 simple moving average might hold as near-term support and lead to another bounce back to the previous resistance. A sharper decline could push Facebook stock to form another channel low near the $75-76/share area.
However, a break below this region might be indicative of further losses, possibly until the next floor at the 200 SMA. This is around the $74/share level, which also coincides with a key horizontal support zone.
The main event risk for US equities, including Facebook stock, this week is the FOMC statement. This could confirm whether or not the US central bank is gearing up to hike interest rates sometime during the middle of the year. If their rhetoric indicates that they are indeed moving closer to tightening, US equities could lose ground on risk aversion and anticipation of weaker spending conditions.
On the other hand, if the Fed declines to provide any hints on potential rate hikes, Facebook stock could bounce off support and head back to its previous highs. After all, a prolonged period of low interest rates could provide more support for the economy and lead to more revenues and profits for US companies.
For now, investors are still wary that Facebook can be able to monetize its recent acquisitions, particularly that of instant messaging apps and virtual reality software, lending more downside for the stock.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org