Facebook Stock Tests Key Support After Rare Downgrade

Facebook is testing its footing above the long-term support of its 80-day moving average

Managing Editor
Jan 12, 2018 at 10:02 AM
facebook X logo linkedin


Facebook, Inc. (NASDAQ:FB) is falling in early trading, after CEO Mark Zuckerberg, announced that the social media platform will be filtering its News Feed to prioritize what's been shared by a user's family and friends, as opposed to non-advertising content produced by publishers and other businesses. Zuckerberg said he expects the shift to have a negative impact on user engagement and time spent on the site over the short term, though there's expected to be no impact on advertising.

In response, Stifel downgraded FB today to "hold" from "buy." Separately, SunTrust Robinson and Morgan Stanley raised their price targets to $240 and $215, respectively.

FB is down 4.5% at $179.32 at last check, with the stock testing critical support at its 80-day moving average, which has contained the equity's pullbacks since last June. This trendline is currently located at $176.90 -- about 6.4% below FB's Jan. 8 record high of $188.90.

Today's downgrade is unusual, as analysts are broadly optimistic toward the social media giant. Prior to the fresh cut at Stifel, all 27 brokerage firms following FB carried a "buy" or "strong buy" rating.

However, in the options pits, sentiment has not been so optimistic. The FAANG stock's International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) 10-day put/call volume ratio ranks in the 86th percentile of its annual range, suggesting that puts have been bought at a faster-than-usual clip relative to calls during the past two weeks.

And while some of this put-buying may have been related to hedging on the part of FB shareholders, it's worth noting that short interest on FB stock rose almost 19% during the past two reporting periods. This recent crop of bears will no doubt be watching the stock's progress around its 80-day moving average very closely in today's trading.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI