Shares of Facebook Inc (FB) reported a stellar quarter considering COVID-19 and the expected drop in advertising spend. However, at the high of $210.00 following earnings, Facebook stock chart analysis says, ‘sell’. This is due to $210.00 being an epic gap fill technical level. To put it in perspective, Facebook has surged from below $140.00 six weeks ago to $210.00 today. That is exactly a 50% move to the upside in six weeks. In addition to the Facebook stock chart analysis sell signal, every other technical indicator on the stock is at extreme overbought levels.
Lastly, just like Netflix dumped after earnings because they said things were as good as they ever will get (because everyone was home binge watching shows), Facebook may be in the same situation. Everyone is home and online. If anyone was going to be on Facebook they would have joined over the last couple months. As things reopen, less will be on Facebook. This means Facebook may actually be seeing a top out on user growth as well as time on the platform, thus a stock price top out as well. The bottom line is, Facebook stock chart analysis and logic says sell/short it.
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