Facebook share: Facebook reacts to this bearish pattern!

Facebook, Inc. (NASDAQ: FB) was trading lower than 3.75% on Tuesday, briefly breaking a key support level at $ 339.92 before rising slightly again. The entire tech sector took a beating, with the Nasdaq falling more than 3.84% in the early afternoon.

The Facebook chart

Between September 10 and September 22, Facebook lost more than 11% of its value before rising slightly again between September 23 and 27. The decline coupled with the rebound caused Facebook to form a bear flag pattern on the daily chart. When the stock failed to hit the eight-day exponential moving average for support on Monday, Facebook responded to that pattern.

Facebook’s Relative Strength Index (RSI) was close to 33%, which is close to the oversold zone. When a stock’s RSI approaches or exceeds the 30% mark, it is a buy-signal for technical traders. When the stock’s RSI fell to 30% on September 22nd, the stock price rose 4% over the next three trading days.

Should Investors Sell Right Now? Or is it worth joining Facebook?

On Monday, it looked like Facebook was printing a big bearish marubozu candle on the daily chart. This candle indicates that lower prices can be expected on Wednesday. If the stock is able to rebound and finish the day above $ 342, that would add enough wick to the candle to indicate demand below that level.

Facebook trades below the eight-day and 21-day EMAs, with the eight-day EMA trending below the 21-day EMA, which are both bearish indicators. The stock is trading about 8% above its simple 200-day moving average, suggesting that sentiment is generally positive.

• The bulls wish for big bullish volume to come in and Facebook to climb back above the $ 349 mark, which would give the stock an opportunity to hit the eight-day EMA again. If Facebook stock can regain that support, it could climb back towards $ 358.
• The bears want Facebook to drop below $ 339 through a high bearish volume. If the stock loses this area as support, it could fall towards $ 333.