Pinterest Needs To Bounce Or Things Could Get Ugly

Pinterest Inc. PINS shares are trading lower in sympathy with Facebook Inc. FB.

Many social media companies are trading lower Monday as Facebook, WhatsApp, Instagram and Twitter, among others, have crashed for users throughout the day. Facebook has also come under fire following a whistleblower report on the company's response to various safety measures.

Pinterest is down 5.81% at $49.57 at the time of publication.

See Also: Facebook, Instagram And Related App Users Report Worldwide Outage

Pinterest Daily Chart Analysis

• Shares have been trading in what technical traders call a downward trending channel. Shares are nearing support in this channel, looking to bounce or break below support.
• Connecting the highs of the chart shows where the stock has found resistance in the past. Taking another line parallel to this line and connecting it to the lows shows where the stock has been finding support.
• The stock is trading below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the sentiment in the stock has been bearish.
• Each of these moving averages may hold as a possible area of resistance in the future.
• The Relative Strength Index (RSI) has been moving sideways below the middle line for a time, and now sits at 34. This nears the oversold range, where selling pressure will be much greater than buying pressure.

What’s Next For Pinterest?

Bullish traders are looking to see the stock bounce at the channel support and begin to head higher toward the resistance. Bulls are then looking to see a break of resistance for a possible strong bullish move after.

Bears are looking to see the stock drop below the channel support for a possible strong bearish move. If the stock can begin to hold this support level as an area of resistance, the stock may be ready to see a strong bearish push.