Facebook Inc (NASDAQ:FB) has been on an exceptional run over the last couple of weeks. That has many Facebook stock investors questioning what the best move is here ahead of next Wednesday’s earnings.
I have some thoughts, but before we get to those, I thought we’d take a closer look at FB’s charts.
Facebook Stock Charts
Facebook boasts one of the best-looking charts — long- and short-term — in the entire market right now. We’ll start with the long-term look, which shows FB since the beginning of 2015.
You’ll notice that Facebook stock has nearly doubled in that time.
There have been a couple sharp and quick pullbacks from time to time, but that’s natural, and overall the stock has been able to continue in a range that includes higher highs and higher lows – the definition of an uptrend. There is no indication that FB stock will break this trend in the near future.
The short-term chart is just as impressive.
You can see below that the stock hit a new all-time high earlier this week before pulling back slightly on average volume as the post-earnings selling in Apple Inc. (NASDAQ:AAPL) weighed on the shares. But keep in mind that that’s a near-term headwind that will be eliminated once Facebook releases its own numbers after the close on Nov. 2.
The level I’m watching in the short-term is the 50-day moving average (the yellow line) at $128. A pullback to that support level would be a 4% drop from the all-time high and would present a great buying opportunity.
Bottom Line on FB
Still, there is the caveat of earnings.
All indications are for Facebook stock to perform well once the results are released — possibly even flying to new highs. But we all know far too well that just one “off” note from management can send the shares tumbling through support.
I suspect we’ll experience the former, with just one potential hiccup: FB stock has been so strong lately that it may run into a “buy the rumor, sell the news” situation.
Nonetheless, I love Facebook stock over the long-term and think it is one of the best-performing tech companies in the market.
Matthew McCall is founder and president of Penn Financial Group, an investment advisory firm. Matt also is Editor of FUTR Stocks and the ETF Bulletin. Earlier this year, Matt and Hilary Kramer teamed up on Breakout Stocks where Matt serves as the Co-Editor. Most recently, Matt and Hilary joined forces again. This time, they are helping individual investors make money trading ETFs. For more on their latest project, visit www.etfedgesummit.com.
