Facebook Finds Resistance At Higher End Of 3-Month Range

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Facebook Inc FB shares were trading lower by $0.50 at $78.34 in Tuesday's session. Despite being rated by Cantor Fitzgerald as one of its top Internet stocks for 2015, it has breached Monday's low ($78.38), reaching $78.10, but has not been able to stage much of a rebound.

Facebook, which staged a dramatic rally last Thursday ($76.71 to $79.42) on the heels of possible valuations of its Instagram unit, has been attracting sellers at the $80.00 level. The follow-through move on Friday was halted at $80.34 and Monday's rally was turned back ahead of that level at $80.19.

In Tuesday's session, it was unable to reach $80.00, stalling at $79.48 after moving up from its early morning low. For the most part, Facebook has been in well-defined trading range since November 21, finding support under $74.00 and resistance near $80.00. It did sprint to new a new all-time high on December 23 ($82.17), but was back under $80.00 a few days later.

A pullback to its former resistance level ($77.00) may be a healthy pullback from its recent rally. However, a breach of $77.00 may take the issue to the lower end of three-month trading at the $74.00 level.