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Weekly Bearish Divergence
The problem we have on the Facebook is not fully confirmed with the price action as we are still holding above the rising support (blue dotted-line). Â But the indicator has already formed bearish divergence on the weekly term (weekly term divergences can be analyzed as intermediate and even primary-term top if its confirmed) with the recent cross to supplement that bearish pressure (see blue arrow). Â This weekly rising support is a ‘must-hold’ level if the bulls do not want to see the bears coming out with intentions. Â In the event that, the price action gets below this rising support, while the indicators continue to head downward, we might see steep decline on Facebook.
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Daily Bearish Divergence
[Chart Screened on 9/30/14 @ 10:17am CT]
We’ve been long since $66ish level, and we closed all of our positions completely on the September 30th mainly because the bearish divergence is started to form. Â At this time though, the price action nor the indicator had full confirmation but it was insinuating (sometimes you just have to take that profit at a certain level when the slightest threat is present).
[Chart Screened Today After Market Close]
After about few weeks later, you can see that the bearish divergence has progressed confirming the price action and in the indicator.  We’ve broken below recent support (blue dotted-line) but $71-$72 level is a potential support so that’s the level to look for a possible bounce.  If we lose $71 level to the downside, things could escalate into much more hectic environment for the buyers.
If that weekly bearish divergence confirms, We may even see a huge decline on Facebook.
