Facebook Is Attempting a Breakout

Facebook has gone nowhere since August, but now the social-media giant could be squeezing toward a breakout.

The first interesting chart pattern is the descending trendline running along the November and January peaks. Prices are now challenging that line.

Second, notice how the 50-day simple moving average (SMA) tried to serve as resistance in late February and early March. But then the rising 200-day SMA emerged from below as support. (See the red and green arrows.) Prices are also breaking above the 100-day SMA.

Next is the $255 area. This was near the top on July 31, when FB gapped higher on strong earnings. That level was another source of support in the recent consolidation pattern along the 200-day SMA.

Finally, notice how MACD is now turning bullish for FB.

The fundamental story could also be interesting because advertising revenue has been strong across the Internet space. Additionally, FB is a member of Communications. That sector, created in September 2018, has broken out as other Nasdaq-heavy buckets like Technology and Consumer Discretionary remain below old highs. Thanks to advertising, Communications may offer the cleanest cyclical exposure of the three.

TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.