Facebook (FB); Critical Level Must Hold
Yesterday I took a look at GOOGL to look for clues as to the future direction of the broader market. Today it's Facebook's turn.
Earlier in the month I was looking for price to form a low at what would have been the bottom of a channel that's been tracing out since 2014. It's quite clear now that this level couldn't hold and given the weakness in the markets, the risk looks to the downside.
The daily chart below, shows that after price gapped down, it's been forming a falling wedge that overshot to the downside and coincided with the March low. Falling wedges that break to the upside typically retrace at first to the beginning of the formation. They can be quite strong patterns. However, when they fail, the implications are likely more bearish than they would have been bullish on an upside break. When price fails to do what is expected, it can often resolve in the opposite direction quite quickly.
If this pattern fails and the March low gives, I see no real support until the beginning of the move from the November 2016 low at 113.55.
I believe the Smart Money is rotating out of FANG...at least for now.
1-0-0-% :)