Facebook (FB) opened in the regular trading session this morning by moving sharply lower. Shares began the day right about the same level they began trading at beginning of the year.
The reason for the drop in price was the company’s announcement of changes to its news-feed. These changes they say, are designed to encourage more meaningful personal interactions. Translation: fewer ads and more cat pictures from your second cousin. This attempt to encourage more meaningful social interaction between people was not appreciated by the machines that trade Facebook stock.
The gap lower this morning, broke through the rising 50 day moving average before finding support just above a horizontal trend line at the $177 level. The move was powered by a surge in negative volume. At this point in the trading day Facebook has recaptured its 50 day average and is near its highs.
It remains to be seen how this new strategy will affect the company’s bottom line, but the levels of support and resistance are well-defined on the daily chart.
Let’s see how those technical levels interact with the stock price.