The Facebook (FB) chart was trying to tell us something on Tuesday. An eveningstar formed on the daily timeframe.
An eveningstar is a three-period reversal candle pattern that is often seen at important tops. It consists of a large up-day candle, followed by a small opening and closing range “doji” candle, and completed by a large down-day candle. It represents a transition from bullishness-to-bearishness.
The moving average convergence/divergence indicator at the top of the chart has been tweaked to reflect the weekly MacD oscillator reading. It made a bearish crossover months ago and has been tracking lower, suggesting an internal loss of positive price momentum.
The Chaikin money flow indicator at the bottom of the chart has also been heading lower.
This lethal combination of price action and money flow caught up with Facebook earlier this month, and it continues to be a drag on the stock.