Monthly time frame:
- From the IPO Facebook has been rising within a channel
- There is no clear indication of a Top, just a warning given by the February Harami candlestick
Weekly time frame:
- If the monthly Harami is flashing a warning maybe Facebook could have carved out an Expanded Ending Diagonal
- This pattern could have established an unforeseen Top
- If we zoom inside the assumed ending pattern we can see that we have another warning with a Shooting Star (First week of February)
- The bounce from the February low has been potent with 4 consecutive weekly higher highs
- The resistance is located at the October high = 110.65
- The weekly RSI is displaying a negative divergence since July 15. Now we have to see if next Friday the MACD confirms a bullish signal cross or a failure
Daily time frame:
- A sharp decline like the one from the February 2 high (Top?) usually has continuity to the down side with at least one more down leg
- The rebound from the February low even if it is potent it could be carving out a Bearish Flag
- Today Facebook has tagged the 0.618 retracement. Above we have two gaps that can be filled
- If a top is in place Facebook has to establish a lower high
- Below the support is located at today's gap up = 106.92
- The daily RSI displays a negative divergence. For the shorter time frame we have to watch the trend line from the January low. The Stochastic is entering the overbought zone while the MACD has a bullish cross but with not enough traction off the signal line (It is vulnerable)
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