PreMarket Prep Stock Of The Day: Facebook
Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.
On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.
Not all technology stocks have fallen victim to the rotation from growth/tech into value stocks. In fact, one major issue in the sector has been bucking the trend and is having a solid month.
Choppy And Volatile In January: After ending 2020 at $273.16, Facebook (NASDAQ:FB) had a rough January. It didn't spend much time above that level when it peaked on the first session of the year at $277.09 and took a tumble.
The ensuing decline found a bottom on Jan. 14 ($244.61) and mounted a rebound. It rallied to $286.70 by Jan. 28, but retreated to end the month in the red at $258.33.
Found A Hard Bottom In February: In the first session of February, which was a Monday, it matched the previous trading day's low, just under $255, and embarked on another rally. This rebound stalled well shy of the January high, only reaching $276.60 and took another tumble.
Although the ultimate low of the decline was $253.50, which was just under the aforementioned double bottom, the issue put in a series of lows in a fairly tight range. In 11 consecutive sessions (Feb. 22-March 8), all of the daily lows were in a range from $253.50-$258.65. This is often the sign of major accumulation by institutions on weakness.
Trading Range, Then Breakout: Just as well defined as the bottom of the trading range during this period, so was the top of the range. During that stretch, all but two of the daily highs were in the range from $265.45-$267.46.
On March 9, with no specific catalyst, the issue extended the top of the trading range, reaching $268.53, and retreated to close at $265.74.
Win Streak: Since breaking out of the trading range, Facebook has been higher in six of the last nine sessions (including Monday), with two of them coming in the first few days. The most recent decline was last Thursday ($284.01-$278.62) but rebounded strongly on Friday to end last week at $290.11.
In Monday’s session, it has continued to make new highs for the session, with the current being $299.68 as of 12:25 p.m. EST.
Moving Forward: Facebook has momentum on its side and the trend in the S&P 500 index is working in its favor. From a short-term perspective, the issue is quickly approaching its Nov. 5 high ($297.38). At this time, it's poised to post its highest close since Nov. 6 if it can end the day above $294.68.
Longer-term, there is no monthly resistance until the pair if monthly highs from August ($304.67, which is the all-time high) and September ($303.60). In order, to identify any potential weakness in the issue, investors may want to focus on the closing high for the rally, which was $290.11 before Monday’s session.
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