100 week MA and 38.2% retracement at the same level
Facebook’s CEO Mark Zuckerberg is about to testify on Capitol Hill.
Everyone knows the story about the data breaches and the misuse of the personal privacy of it’s users.
However, there is a technical story that not everyone knows.
Looking at the weekly chart above, the price high reached $195.32 back in February 2018 and moved to a low of $149.02 at the end of March 2018. That move represents a 23.7% decline from the high. That is nothing to sneeze at for sure.
The fall from the top got within about $1 of a key technical support level. That comes in at the 100 week MA AND the 38.2% of the move up from the August 28,.2015 corrective low (week low). By the way, the August 2015 low (see chart) was the last time the price tested the 100 week MA. At that time, the price bottomed. At the current price, the stock is up 127% from that low. That’s nothing to sneeze at either.
Currently, both the 100 week MA and the 38.2% retracement come in at the exact same level today – at $148.21 (to the penny). Needless to say, that is the technical story that lots of traders in Facebook world don’t necessarily know about. Now you do…..
What does it mean?
For the longs, you have your risk level. Stay above (over time), and you hope the Facebook problems are solved, the earnings and growth continue, and the price goes higher like all growth stocks.
The 50 week MA comes in at $169.84 currently, and that would be a target on the topside now.
Should Zuckerberg crash and burn, and the story for Facebook turns very bad fundamentally, the technical story gets increasingly more bearish on a move below the $148.21 level.
If longs can live with that risk, stay long and hope for the best.
Let the games begin.
PS the Dow is up 455 or 1.9%. The Nasdaq is up 134 or 1.94%
Zuck looks a little sick….