Despite the fact that Facebook (NASDAQ:FB) IPO was just a year ago, Facebook stock price has already bounced off the 200-day moving average at least 5 times! Perhaps it’s time to bounce once again?
5 dates Facebook stock price respected the 200-day moving average
- July 20, 2012: The downtrend has already begun, 2 months since the Facebook IPO. Shares meet resistance at $29.50.
- July 26, 2012: Facebook stock makes attempt to overcome the previous resistance, but prints a double top instead at the same exact price ($29.50). The next day’s gap down (breakdown as well) was nothing compared to the $3.50 gap down that followed on July 28!
- October 25, 2012: Facebook stock opens at 4.50 dollars higher than previous close, exactly on the 200-day moving average! However, shares plummet until mid-November to the most recent support level ($18.80).
- March 28, 2013: Facebook shares have been trading above the 200-day moving average for 4 months, before they pull back to the 200-day moving average.
- April 19, 2013: Another pullback to the 200-day moving average, but lower tops are becoming worrying.
There’s another bounce off close to the moving average right after Christmas 2012. That retracement though occurred almost a dollar higher than the moving average, so we will disregard it.
Nowadays Facebook stock is trading very close to the 200-day moving average. The latest top at $29 was higher than the previous one at $28. The stock has met resistance 4 times exactly at $29 before, as noted in the chart. $25 is also a respectful support level for Facebook share price, creating a trading range (25-29).
A possible 5th bounce off the 200-day moving average will also confirm the S1 monthly pivot point ($25.39). Now traders just need a bullish pattern to be completed following Thursday’s inverted hammer candlestick. That is why Facebook stock is already in my today’s watch list!
