Navigating Facebook's Precarious Technical Setup
by Mike Paulenoff
December 27, 2020 • 12:00 AM EST
During late November into early December, Mike Paulenoff became increasingly concerned about the price behavior of Facebook (FB).
The stock not only was grossly underperforming the NDX but also was in the news constantly in an unflattering light regarding its leader, Mark Zuckerberg, and censorship accusations. Since early November, the NDX is up about 10%, while FB is unchanged.
More recently, on the morning of Dec 15, Mike alerted MPTrader members to the precarious technical setup in FB, writing: "FB is pressing on key nearest support at 269-270, which if violated and sustained will point to a confrontation with more consequential support at 264.50-265.00."
This past Tuesday FB got down to that very support level, reaching a low of 264.63.
In his Dec 15 alert, Mike had noted that a break below that level would trigger downside projections to 248-244. He continues to maintain that FB, which closed pre-Christmas at 267.01, must contain any forthcoming weakness to avert a technical break that has the potential to morph all of the price action since mid-August into a consequential top formation.
On the other hand, perhaps bullish seasonal expectations into year-end will put a floor under FB into early January? Keep an eye on resistance at 280.50, above which FB's downside technical set-up could be neutralized.
Join Mike and our MPTrader members as they navigate the twists and turns of FB, and many other stocks, ETF, indices, and commodity markets into year-end and as we enter 2021.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
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Back on June 17th, this is what we discussed about the TLT (20+ Year T-bond ETF)when it was trading at 112.53:
The TLT put in a big upside reversal day yesterday (6/16/22) from 107.80 to 111.72, closing RIGHT AT the High of 111.72, leaving behind a Bullish Engulfing Candle on my Daily Chart (not shown here). The last time TLT traded at 107.
On Friday June 17, Mike Paulenoff posted an alert to MPTrader members about an emerging setup in AMZN:
AMZN is one name that pops out at me that should benefit from an initial and sustained correction in traditional energy and transportation costs. AMZN needs to climb above and sustain 110 for my work to generate a more confident technical signal, otherwise, I cannot rule out another loop down that tests and breaks key May-June support at 101.26 to 101.
Last Wednesday, prior to the official FOMC rate hike of 75 bps, Mike Paulenoffwarned MPTrader members about the likelihood of additional weakness in the beleaguered home builders, writing about the ITB (iShares US Home Construction ETF):
In that, neither my pattern work nor my intermediate-term Momentum gauges offer much technical confidence that ITB will be able to carve out a meaningful corrective basing area in and around 53.
Back on May 13, amid a thrust in the price of Crude Oil from $95/bbl to $112/bbl, Mike Paulenoff alerted MPTrader members to an actionable technical setup in energy producer PSX (Phillips 66), writing:
My work has been extremely friendly since the beginning of May, looking for PSX to break out of its 11-month corrective accumulation pattern that will trigger a thrust towards a potential target zone of 110-115.
On Thursday May 19, in the midst of some serious weakness and carnage in the retail sector that had equity market-watchers doubting the resiliency of the almighty US consumer, Mike Paulenoff turned MPTrader members attention to PARA (Paramount Global), writing:
For the past 5 months, we could make the technical argument that PARA has carved out an accumulation-base formation that attracts buyers every time the stock dips beneath 29.00. We can also make the case that every time the stock climbs above 36.
