Facebook shares are still stuck in consolidation, as price has been crossing back and forth from the 50 simple moving average on its daily time frame. This short-term SMA is still above the longer-term 200 SMA though, which means that the uptrend might still resume later on.
MACD is also moving out of the oversold area, indicating that buying pressure could pick up soon. If that happens, Facebook shares could break back above the 50 SMA and move towards the nearby resistance at $78/share or higher towards $80/share.
Facebook Shares Forecast
Changing risk sentiment has kept Facebook shares in range for quite some time, although most US equities have seen further upside. Earnings of Facebook came in much stronger than expected for Q4 2014, but this failed to trigger a strong rally for the stock.
“FB beat revenue and earnings once again, but the Street is no longer rewarding the outperformance,” said Janney Capital Markets analyst Tony Wible, who maintained a neutral rating on the stock.
As it turns out, investors aren’t too confident that the company’s massive spending on research and development would prove to be profitable later on, as Facebook still hasn’t capitalized on its recent acquisitions. New development from the social media company might allow Facebook shares to break out of its range but there appear to be none so far.
The upcoming release of the FOMC minutes might also provide some direction for the stock this week, as this could reinforce the belief that the US economy is outpacing its peers. This could lead to record gains for equity indices once more, lifting risk appetite and Facebook shares in the process.
On the other hand, cautious comments could lead to more downside, as skeptics could focus on the downturn in spending and inflation. If so, Facebook shares might tread lower to test support at the 200 SMA.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org