Facebook Helping Propel the S&P 500 SPDR Communications Sector Higher as a New Bullish Cycle Confirms
Facebook is part of the new S&P 500 SPDR Communications Sector (XLC). This sector includes other well known FANG stocks, with Facebook (FB), Alphabet (GOOGL), and Netflix (NFLX) making up 42.16% of the total weighting. Facebook and Alphabet are the largest weightings, with Netflix coming in at a mere 5.32%. ATVI, T, VZ, DIS, CMCSA, and CHTR round out the top holdings in this group.
Summary
Communications Sector
The cycle in the communications sector is trending. We also note all other SPDR sectors have turned bullish as of two weeks ago. In addition, we pointed out in Tuesday’s BLOG POST how the major indices started this new cycle on December 26.
As the sector and stocks therein continue closing each day above the previous high of the day (PHOD) we can assume followthrough until that pattern changes. With this in mind, we have pointed to targets on the sector chart above. Look for a pause at these levels.
Facebook – Daily
The “W” pattern on Facebook (FB) is apparent with each follow-through day bringing the stock closer to a breakout above the center of the “W” at 145.93. With the stock trading above Tuesday’s close/resistance levels, we are targeting 145.93 today, provided the indices drive higher.
Facebook 60 Minute
Given the 24.77% pullback in the XLC sector and the 43.71% pullback on Facebook from recent highs, traders are presented with a compelling situation. If the return of bullish momentum accelerates, we are looking for a decisive break above 143.20 (+/-). This continuation would trigger a confirmation long position. As always, we will reassess after the opening range is set.
Swing traders can use support levels noted just below 141.72 and 139.00 (+/-). Short-term day traders can use the 5 minute 9/20ema.
Futures were higher this morning.
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Happy Trading,
Vinny
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