Facebook Breaks Resistance, Time to Buy?
Shares of Facebook $FB broke past the high since the gap lower in late July at 2454 and now some people are considering buying the “breakout” Before putting your money at risk as these two questions.
1- Where has the stock come from?
FB has rallied from a low of 18.87 to an intraday high today of 24.68, that is just over 30% in just nine trading sessions! The stock may continue higher, but chances are good that holders from lower prices will be taking some profits here.
2- Where does it have the potential to go before it is likely to encounter a source of supply which will halt the advance (resistance)?
The year to date volume weighted average price in FB is approximately 24.76. I do not consider this to be an impenetrable level but after a strong rally such as we have seen it is worth noting as potential resistance.
Best case for new purchases in FB would be for some pullback down towards 22.50-23.00 and then seeing how it sets up in that area.