Facebook (FB) Stock Forming Base at $49, Trading Above Descending Channel

Despite reporting earnings that easily exceeded expectations, some comments from the conference call spooked investors and sent shares of Facebook (FB) into a downtrend for the past month. Last week FB broke through the upside of their descending channel and appear to be forming a floor at $49. I viewed the market’s reaction to management’s comments during the CC as irrational and overstated and believe their long-term growth prospects are still well-intact. If shares have truly broke out of their downtrend and are forming a base at $49, this level should prove to be an attractive long-term entry point. We will be monitoring their price action closely today, looking for FB to remain above $49 and confirm their break out.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.