Is Facebook Inc. (FB) bottoming? My answer would be a questionable "maybe."
FB has come off the November low below $130 but volume is not all that impressive. I can't say with assurance that we got a retest of the November low to give me confidence that someone was willing to defend the level.
Let's check out a few charts and indicators so you can see what I see.
In the daily candlestick chart of Action Alerts PLUS holding FB, below, we do not see any of the common reversal patterns at the November low -- no hammers, no doji, no bullish engulfing pattern, no piercing pattern. The trading volume at the low is slightly higher but not at a level that would suggest a reversal.
The daily On-Balance-Volume (OBV) line does creep higher from the November nadir but this too is not super strong. The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in late November for a cover shorts buy signal. The MACD oscillator has yet to cross the zero line for an outright go long signal.
In the weekly bar chart of FB, below, we can see that prices are below the declining 40-week moving average line. The weekly OBV line rolls over this summer and edges up slightly from November.
The 12-week price momentum study in the lower panel shows higher lows in momentum. This is not exactly the kind of bullish divergence that I like to see but it does say that the decline has been slowing.
In this Point and Figure chart, below, we can see a possible upside price target of $165 being projected. A decline to $138 will weaken the chart.
Bottom-line strategy: So back to the question at hand: Has Facebook bottomed? After declining about $90 in four months I think we need more sideways price action and more signs of renewed buying.