The Facebook stock edged south after breaking below the lower bound of the sideways range that contained the price action between June 10 and September 13. The slide found a bottom at 87.00 on November 3, as thereafter the stock formed a higher low on November 28. What’s more, on the first day of December, investors took the price above 118.00, confirming a higher high and the completion of a failure swing bottom.

Although this is usually considered a trend reversal pattern, the stock is still trading below the downtrend line drawn from the high of May 4 and thus, a break above that line and the key resistance of 137.00 may be needed before a reversal is fully completed. Both our short-term oscillators are detecting positive momentum, supporting further advances, at least until those resistance zones.

If the bulls are strong enough to emerge above the 137.00 zone, which acted as a temporary ceiling between October 18 and 25, they may get encouraged to climb higher, towards the 154.00 hurdle. The 154.00 level acted as the lower bound of the aforementioned sideways range and almost coincides with the 50% Fibonacci retracement level of the May 4 – November 3 slide.  If they are not willing to liquidate there, then they may extend their march towards the upper end of the pre-discussed range, at around 183.00.

On the downside, a break back below 107.00 could wake the bears up again, as it may confirm the downside violation of the upside line drawn from the low of November 4. The next stop may be the low of that day at 87.00, the break of which would take the stock into territories last seen in August 2015. Investors may then allow the slide to continue towards the 73.00 territory, which acted as a strong floor between August 2014 and February 2015, or towards the low of June 9, 2014, at around 61.50.