Social media giant Facebook, Inc. (FB) is one of the top momentum stocks of 2017 but could end the year with a negative weekly chart. I view myself as a power user of the Facebook with nearly 5,000 Friends and two fan pages under my control. I even did some Christmas shopping for some interesting items on Facebook. With the company also acting as an online retailer, you can buy items with the click of a mouse on your PC or laptop, or by using the Facebook App on your handheld device.
The stock closed Wednesday at $177.99, up 54.4% year to date and in bull market territory at 53.8% above its 52-week low of $115.51 set on Jan. 3. The stock set its all-time intraday high of $184.25 on Nov. 28, the day after Cyber Monday, and it is currently 3.6% below that level. (See also: Why Facebook Will Keep Making Money.)
Here's how the numbers worked in 2017
Facebook closed 2016 at $115.05, and my annual value level of $109.79 never came into play. At mid-year, the stock closed at $150.08, and my semiannual risky level of $180.34 became my upside target, which was first tested on Oct. 30. This level has been a pivot (or magnet) since then, and the stock set its all-time intraday high of $184.25 on Nov. 28.
The daily chart for Facebook
Facebook stock has been above a "golden cross" since Feb. 1, when it closed at $133.23. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. The horizontal line shows the semiannual pivot of $180.34, which has been a magnet since Oct. 30.
The weekly chart for Facebook
The weekly chart for Facebook is neutral, with the stock lined up on its five-week modified moving average of $177.62. The stock is well above its 200-week simple moving average at $109.78, which is also the "reversion to the mean." The 12 x 3 x 3 weekly slow stochastic reading is projected to end this week by sliding to 72.57, down from 76.40 on Dec. 22 and declining below the overbought threshold of 80.00. A close on Friday below $177.62 would result in a negative weekly chart.
Given these charts and analysis, it appears that Facebook will begin 2018 below new monthly, quarterly, semiannual and annual risky levels, likely within the range of $186.87 to $202.64. This configuration provides a warning to reduce holdings by 25% over the next two trading days. (For additional reading, check out: Buying Facebook Stock, a Beginner's Guide.)