FB breaks back below 50-day moving average
Facebook Inc. (FB) Technical Analysis Report for Oct 28, 2020 | by Techniquant Editorial Team
FB ended Wednesday at 267.67 tanking $15.62 (-5.51%), strongly underperforming the Nasdaq 100 (-3.93%). This is the biggest single-day loss in over four months. The bears were in full control today, moving the market lower throughout the whole session. Closing below Tuesday's low at 276.31, the market confirmed its breakout through the prior session low after trading up to $9.05 below it intraday.
Daily Candlestick Chart (FB as at Oct 28, 2020):
Wednesday's trading range has been $11.53 (4.14%), that's far above the last trading month's daily average range of $6.99. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for FB.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and two bearish patterns, the Bearish Belt-hold and the Black Candle. The last time a Black Candle showed up on Monday, FB actually gained 2.23% on the following trading day.
The share closed back below the 50-day moving average at 270.47 for the first time since October 20th.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
As prices are trading close to October's low at 254.82, downside momentum could speed up should Facebook mark new lows for the month.
Among the 13 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Very Strong Down Move" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Facebook. Out of 89 times, FB closed higher 61.80% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 66.29% with an average market move of 1.65%.
With four out of the other four FAANG Stocks closing lower today, the ones that stand out on the negative side are GOOGL losing -5.51% and AAPL closing -4.63% lower. None of the markets managed to end the day in the green. Read more