After rallying to new all-time highs following a big Q1 earnings beat, Facebook Inc FB shares pulled back significantly in the weeks that followed. However, the stock’s dip below $148 on Wednesday morning may have been a bullish technical buying signal for traders.
After Facebook’s earnings beat, the stock jumped from below $148 to above $149, leaving a small gap in the stock’s chart. Technical traders know that these gaps tend to get filled in time. Sure enough, after pushing as high as $153.60 in the days following earnings, Facebook shares stalled and have been drifting lower ever since. Wednesday morning, the stock dipped as low as $147.26, finally completely closing the post-earnings gap.
Related Link: Mark Cuban Argues Why FANG Stocks Are Still Undervalued
Facebook investors may not be thrilled with the 3.6 percent pullback from highs, but the move may have been technically constructive for the stock. Once a gap is filled, a stock is free to resume its previous trend, meaning the dip could be a great buying opportunity for traders. Facebook quickly bounced more than a dollar off of the opening dip to $147.26.
Facebook’s stock has already rallied more than 155 percent in the past three years, but billionaire entrepreneur, “Shark Tank” panelist and Dallas Mavericks owner Mark Cuban said earlier this week he believes Facebook and its “FANG” peers Amazon.com, Inc. AMZN, Netflix, Inc. NFLX and Alphabet Inc GOOG all have plenty of growth ahead due to the power of deep learning.
Despite the post-earnings selloff, Facebook shares remain up 28.7 percent in 2017.
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