Facebook Stock Heats Up As Other Companies Report Good Earnings

Facebook Inc. FB shares were trading higher Friday in sympathy with Twitter Inc. TWTR and Snap Inc. SNAP after both companies reported better-than-expected second quarter earnings. 

Facebook Daily Chart Analysis

• Shares look to have broken out of what technical traders would call an ascending triangle pattern and tested old resistance as support before moving higher.
• The stock is trading above both the 50-day moving average (green), and the 200-day moving average (blue), indicating the stock has had bullish sentiment.
• Each of these moving averages may hold as an area of support.

Key Facebook Levels To Watch

• The ascending triangle pattern was showing resistance near the $300 level before it was able to push above it.
• As the stock has already broken out of the pattern and broken above resistance, the only support that may hold again is the higher low trendline.
• The Relative Strength Index (RSI) has been steadily moving higher throughout the past week or so and now sits at 68. The stock is nearing the overbought area that starts at the 70 level on the indicator.

What’s Next For Facebook?

Bullish traders would like to see the stock continue to trade along the higher low trendline and keep gaining ground. Bulls want to see the stock stay above both the higher low trendline and the moving averages to keep full control of the stock.

Bearish traders would like to see the stock fall below the higher low trendline and then fall down below the moving averages for a possible change in trend. Bears would like to see the RSI fall and cross below the midline.