Facebook Stock Rejected At Resistance, Needs To See A Bounce At This Key Level

Facebook Inc. FB shares are trading lower Wednesday, a possible reaction to recent WSJ reports alleging issues at the company, including mental health impacts of Instagram. The stock is also trading within a technical pattern.

Facebook is down 3.2% at $345.93 at publciation time.

See Also: Why Are Facebook Shares Trading Lower Today?

Facebook Daily Chart Analysis

• The stock looks to have found another resistance level and formed into what technical traders call an ascending triangle pattern.
• The $380 price level is a level where the stock recently was not able to break above. This price then started falling toward the higher low trendline, where it has been able to find support for quite some time.
• The stock trades below the 50-day moving average (green), but above the 200-day moving average (blue), indicating the stock is likely facing a period of consolidation.
• The 50-day moving average may act as a place of resistance, while the stock may find support near the 200-day moving average.
• The Relative Strength Index (RSI) has been falling quickly the past few days and now sits at 29. This indicates the stock is now in the oversold area, a place where selling pressure overwhelms buying pressure by a lot.

What’s Next For Facebook?

Bullish traders would like to see the stock bounce off of support and begin to head higher once again. Bulls are then looking to see the stock continue pushing higher and break above the $380 level to continue on its uptrend.

Bears are hoping the stock falls further and breaks below the higher low trendline. A break below the higher low trendline will signal that the stock is likely making a trend change and could be in for a period of bearish movement.