Facebook fell from the highs recently but pulled back to a key support area to trigger a possible buy signal.
Today we’re seeing a logical rally and will be watching what happens next for any new trading plan updates:
Facebook shares (NASDAQ:FB) remain in an uptrend which suggests we use retracement style strategies to trade the stock.
The last successful pullback was in April ahead of a stellar rally into May.
However, shares puled back again to the $150 level and now to the $144.00 target of the 50 day EMA and prior price high (yellow highlight).
Yesterday triggered an aggressive pullback buy signal into this confluence support level and today we’re seeing the expected “bullish bounce away from this level” price action give profits to aggressive bulls.
For those not positioned – or managing open positions – watch what happens here as price tests (touches) the underside of the 20 day EMA (green).
I refer to this as being “trapped” or trading between the daily EMAs and we usually get a breakout trade if buyers can keep up the momentum here.
If instead sellers take over and tip the balance, bearish breakdown trades will be favored beneath the 50 day EMA.