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Facebook Facing Up?

08/30/13 10:33:41 AM
by Jayanthi Gopalakrishnan

Shares of Facebook have been bullish of late. Can we expect a continuation going forward?

Security:   FB
Position:   Hold

After the much talked about dismal initial public offering (IPO), shares of Facebook (FB) are finally showing some spark. Those who jumped on board this rally would be considering themselves fortunate. For them, it's a matter of deciding when and where to take profits.

Figure 1. Daily chart of Facebook (FB) showing that the stock price appears to be approaching overbought levels.
Graphic provided by:
Looking at the chart of FB in Figure 1, it does look as if price is in overbought territory. The slow stochastic is above 80, but has room to move a little higher. The moving average convergence divergence (MACD) shows that the trend could continue higher or it could turn around. And price is still hugging the upper Bollinger Band. There is a chance that price could pullback some time soon. If a pullback was evident, those holding long positions could take partial profits and those who missed the ride could take advantage of this pullback and enter long positions.

But given that anything can happen in the markets, especially as we go into this long weekend, be mindful of a pullback turning into a reversal and manage your open positions accordingly.

Jayanthi Gopalakrishnan

Title: Editor
Company: Technical Analysis of Stocks & Commodities
Address: 4757 California Ave SW
Seattle, WA 98116
E-mail address:

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