Facebook in strong uptrend before the earnings report on Wednesday.
The stock has been in a stable uptrend since breaking out in July 2013.
In April of this year, the shares broke out above the top of the bullish price channel that had been in place since July 2013.
The uptrend has accelerated in recent weeks moving price even further from the prior channel top.
The current point of intersection with the old channel top is at the $150 area. If the news is strongly positive, exceeding even the most current expectations, the breakout may extend.
The very top of the current price channel when projected forward in the near-term reaches the $168 area. Beyond that, a move to the $170-$175 area might be possible.
If the news doesn’t meet expectations, given the sentiment in the name a pullback could be quite large.
Initial support would be at the $156.50 area, which is the top of the consolidation range from May to early July of this year. Thereafter the $150 area would be next.
A move below $150 might seem like an extreme move, but would still leave price within the long-term channel. The low of the old long-term channel is at the $135-$134 area.
The consensus estimate on Facebook for Q2 revenue is to reach $9.17 billion. The consensus on adjusted earnings is $1.12 a share. Revenue from advertising is expected to come at $8.78 billion.
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