Will Facebook drop 17% from resistance or breakthrough?
This week, risk assets in currencies and commodities have tumbled lower with the New Zealand dollar, Australian dollar and WTI crude oil leading the way lower. So far, equity markets haven’t followed through but investors are very cautious at these multi-year highs.
The tech sector could be in particular focus as it has struggled to regain its momentum since the surge in bond yields caused the tech-heavy Nasdaq 100 index to collapse. It’s also why Facebook shares are currently at an interesting juncture.
Source: Admirals MetaTrader 5, #FB, Weekly - Data range: from Sep 1, 2013, to Mar 23, 2021, performed on Mar 23, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
In the long-term, weekly price chart of Facebook’s share price above, it’s clear to see the recent trading range that has developed between the two horizontal red lines. The upper horizontal resistance line is around the $295.00 price level, with the lower horizontal support line around the $247.00 price level.
Currently, price is at the top of the range and as the stock has been trending up in the long-term, traders may well be eyeing up a potential break towards the upside. However, that would go against the current backdrop of ‘risk-off’ in other asset classes.
Source: Admirals MetaTrader 5, #FB, Weekly - Data range: from May5, 2019, to Mar 23, 2021, performed on Mar 23, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.
If the price fails to breakthrough, it could move back to the lower part of the range signifying a 17% drop. Analysing price action will be key to determining whether the buyers or sellers are going to win the battle at current levels.
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