Facebook Analysis and market directionHello everyone, as we all know the market action discounts everything :)
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Facebook Stock took a big hit yesterday after the Technical problem that the company had that caused every website that the company owns to go down (Facebook-Instagram-WhatsApp) the stock dropped from 344.92 to 323.65 . That is a 6.1% drop in one day !!
The company has fixed the problem and Mark Zuckerberg Posted on Facebook saying "Facebook, Instagram, WhatsApp, and Messenger are coming back online now. Sorry for the disruption today -- I know how much you rely on our services to stay connected with the people you care about."
And Facebook posted saying "Our engineering teams have learned that configuration changes on the backbone routers that coordinate network traffic between our data centers caused issues that interrupted this communication,"
Technical Analysis with possible Scenarios for the market :
Scenario 1 :
The stock price right now is trading near the first resistance line located at 333.88 and today Candle was green showing that the stock is finding its ground after the drop.
The stock will probably go up and break the first resistance level and will be headed back to where it was a couple of days ago, The major stop for the stock will be the resistance level at 347.12 where the Bulls will have to prove how much power they have for any hope for a Bullish trend.
Scenario 2 :
The Bears were already building up for a move like this as we can see on the chart for the last one month a Short-Bearish trend has started where the stock price started dropping from the 382.95 range and reaching 338.57 at the end of September. The big battle between the Bulls and the Bears will probably happen at the support level located at 320.64 where the direction of the market will be determined by who wins that battle.
Technical Indicators show :
1) The market is below 5 10 20 50 and 100 MA and EMA but still above the 200 MA, EMA which indicates a Bearish movement for the near future but Bullish for the long run.
2) The MACD is below the 0 line indicating that the market is in a Bearish state, With a negative crossover between the MACD line and the Signal line.
3) The STOCH has reached the oversold zone and looks like it's getting ready to go back up again.
Daily Support & Resistance points :
support Resistance
1) 320.64 1) 333.88
2) 315.05 2) 341.53
3) 307.40 3) 347.12
Weekly Support & Resistance points :
support Resistance
1) 335.73 1) 352.73
2) 328.44 2) 362.44
3) 318.73 3) 369.73
Fundamental point of view :
Facebook took another pounding in the U.S. Congress on Tuesday and a senator called on federal regulators to investigate accusations by a whistleblower that the company pushed for higher profits while being cavalier about user safety.
In an opening statement to a Senate Commerce subcommittee, chair Senator Richard Blumenthal, a Democrat, said that Facebook knew that its products were addictive, like cigarettes. "Tech now faces that big tobacco jaw-dropping moment of truth," he said.
He called for Facebook CEO Mark Zuckerberg to testify before the committee, and for the Securities and Exchange Commission and Federal Trade Commission to investigate the social media company. According to Reuters
This is my personal opinion done with technical analysis of the market price and research online from Fundamental Analysts and News for The Fundamental point of view, not financial advice.
If you have any questions please ask and have a great day !!
