Denver, CO – (Stocksntrade) – 05/01/2014 – Facebook Inc (NASDAQ:FB) has seen a fierce downtrend right from the time it hit an all-time high of $72.8 at the end of March, 2014. The stock has been forming a series of lower tops and lower bottoms. The stock broke below an important trend line support and formed a fresh low of $54.66. The stock has seen a sustained amount of buying at these low levels over the past couple of days which has seen the stock climb back above the trend line resistance on the back of good volumes. We believe the stock would find resistance now at levels of $62.5 and only closing above this level would propel the stock into a strong uptrend going forward.
The momentum indicator for the stock are in negative territory and even though there has been buying at lower levels the momentum indicators haven’t yet given us a buy signal which makes us cautious about this up move. The relative strength index for Facebook Inc (NASDAQ:FB) have shown some strength but haven’t given a breakout for an upside reversal for the price.
The weekly charts for Facebook Inc (NASDAQ:FB) have shown a downtrend for the last couple of weeks and even though we have seen some kind of a pullback in the last week the momentum indicators for the stock on the weekly charts haven’t shown any signs of a reversal which makes us believe that the up move on the stock might be limited. The relative strength index for the stock on the weekly charts isn’t exhibiting any strength on the upside which makes us believe that if the stock isn’t able to close above $62.5 on a weekly closing basis we might see a downtrend.
(Figure): Daily chart for Facebook Inc (NASDAQ:FB)
Latest Buzz: Facebook Inc (NASDAQ:FB) introduced a mobile like button which can be used to share content from even third party applications.