The $FB (Meta Platforms Inc) share price could be on the verge of a 𝙢𝙖𝙟𝙤𝙧 𝙗𝙪𝙮 𝙨𝙞𝙜𝙣𝙖𝙡. This would require a breakout above the previous all-time high. The chances of this are good; the long-term trend is upwards. At the same time, the share prices are showing relatively solid support. What price levels investors must watch out for now - and how to participate profitably in a price rally.
𝗜𝗻𝗶𝘁𝗶𝗮𝗹 𝗦𝗶𝘁𝘂𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗦𝗶𝗴𝗻𝗮𝗹
All-time high ahead! Facebook's share price is strong on this Monday, gaining 2.5 per cent and around 290 US dollars. The positive price movement of the recent past is thus entering the next round. Review: In the past four trading weeks, the shares of the social network went up from 253.50 US dollars to 299.70 US dollars. The penultimate candles in the weekly chart with their relatively large, white candle bodies still testify to the strength of the stock today. The share is thus behaving differently from the tech-heavy $NSDQ100 in particular.
In the short term, the rising 21-day line at 268.17 US dollars provides short-term support. Just below it is the 200-day line (263.25 US dollars). It reinforces the support area around US$ 264, as shown in the daily chart. But beware: The recent upward rally has also led to the underlying stock running a little hot in the short term. The stock is in danger of being considered "overbought", as chartists say. An indication of this is provided by the percentage gap between the 21-day line and the share price. The gap between the Facebook share price and the 21-day line is currently 9.5 per cent and, in retrospect, already indicates that the share price is overheating - see the line below the daily chart. This could at least lead to a further sideways movement, especially as resistance is to be expected in the area of the previous all-time high at 304.67 US dollars.
𝗧𝗵𝗲 𝗰𝗵𝗮𝗿𝘁𝘀 𝗶𝗻 𝗱𝗲𝘁𝗮𝗶𝗹
As far as the longer-term outlook is concerned, a look at the weekly/monthly chart will help. A look at the monthly chart in particular can be very interesting. It reveals the medium-term trend behaviour of an underlying instrument, often over a relatively long period of time. This is because the monthly chart is based on monthly price data. In the case of candlestick charts, for example, each candle represents the price behaviour of a trading month: the opening and closing price of the month; the high and low of the month.
To be seen in the monthly chart: The previous all-time high at 304.67 US dollars. Prices have been gnashing their teeth at this level for eight months. But it is a barrier that can be overcome! A breakout could happen soon. After all, the stock has accumulated a lot of power due to the past sideways trend. On the other hand, the overbought market situation experienced last summer has neutralised to a healthy level again; the line below the monthly chart speaks of this. Furthermore, the rising course of the 200-day line testifies to an intact upward trend.
𝗪𝗵𝗲𝗿𝗲 𝗱𝗼 𝘄𝗲 𝗴𝗼 𝗳𝗿𝗼𝗺 𝗵𝗲𝗿𝗲?
The starting position is convincing on the long side. If there were a significant breakout above the previous all-time high at 304.67 US dollars, this would be interpreted as a strong buy signal. The subsequent price target would then be around 330 US dollars, i.e. almost ten percent above the breakout level. Currently, it is also possible to act with a relatively tight stop-loss price. Initially, this could be set just below the 244.13 price mark, where a multi-month low is located, as shown in the monthly chart.
𝗩𝗲𝗿𝗱𝗶𝗰𝘁: 𝗪𝗮𝘁𝗰𝗵𝗹𝗶𝘀𝘁 𝗖𝗮𝗻𝗱𝗶𝗱𝗮𝘁𝗲
What do you think about the trend? Let me know!