After rallying to new all-time highs following a big Q1 earnings beat, Facebook Inc FB 0.23% 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.
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…
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