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Facebook: The Unforseen Top?

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

Facebook Monthly Chart
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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

Facebook Weekly Chart
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  • 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

Facebook Weekly Wedge Chart
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  • 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

Facebook Weekly Momentum Chart
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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

Facebook Daily Chart
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  • 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)

Facebook Daily Momentum Chart
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I provide Technical and Elliott Wave analysis of different asset classes: Stocks, Equity Indices, Fixed Income, Currencies and Commodities at the website: http://www.thewavetrading.com/

 

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