Will Facebook drop 17% from resistance or breakthrough?

By Admiral Markets

This week, risk assets in currencies and commodities have tumbled lower with the New Zealand dollar, Australian dollar and WTI crude oil leading the way lower. So far, equity markets haven’t followed through but investors are very cautious at these multi-year highs.

The tech sector could be in particular focus as it has struggled to regain its momentum since the surge in bond yields caused the tech-heavy Nasdaq 100 index to collapse. It’s also why Facebook shares are currently at an interesting juncture.

Source: Admirals MetaTrader 5, #FB, Weekly – Data range: from Sep 1, 2013, to Mar 23, 2021, performed on Mar 23, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results. 

In the long-term, weekly price chart of Facebook’s share price above, it’s clear to see the recent trading range that has developed between the two horizontal red lines. The upper horizontal resistance line is around the $295.00 price level, with the lower horizontal support line around the $247.00 price level.

Currently, price is at the top of the range and as the stock has been trending up in the long-term, traders may well be eyeing up a potential break towards the upside. However, that would go against the current backdrop of ‘risk-off’ in other asset classes.

Source: Admirals MetaTrader 5, #FB, Weekly – Data range: from May5, 2019, to Mar 23, 2021, performed on Mar 23, 2021, at 8:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.

If the price fails to breakthrough, it could move back to the lower part of the range signifying a 17% drop. Analysing price action will be key to determining whether the buyers or sellers are going to win the battle at current levels.

Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on thousands of other instruments across Forex, stocks, indices, commodities and more?

You can get this indicator completely FREE by upgrading your MetaTrader 5 trading platform provided by Admirals (formerly Admiral Markets) to the exclusive Supreme Edition! You’ll also receive a whole range of advanced trading tools such as correlation and sentiment indicators!

Start your free download by clicking on the banner below:

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
4. The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.
5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

By Admiral Markets