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Another FANG Stock Is Near Breakout To Buy Zone, But Mind This Flaw

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FANG stock Facebook ( FB ) is trading very near a flat base buy point of 175.59, closing Friday at 173.74. The stock could soon break out to a new high, but it's important to point out a lagging Relative Strength line.

[ibd-display-video id=2360634 width=50 float=left autostart=true]The Relative Strength line measures a stock's price performance vs. the S&P 500. So if the line is trending higher, that signals outperformance.

For a breakout, a bullish indicator is the Relative Strength line hitting new high ground. Often times, the line at a new high confirms a breakout. That means that in the past, we've seen that when the line hits a new high, a breakout has a greater chance of succeeding.

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While Facebook's Relative Strength line is lagging slightly in the last few weeks that doesn't necessarily mean that Facebook's breakout will fail. We've seen other signs of strength from Facebook lately. Namely, its performance around the 50-day line.

Amid a big tech sell-off in late September, Facebook breached the key 50-day line in heavy volume. While its move that day was bearish, shares quickly retook the line and found support their as they continued to climb up the right side of the base.

For all the details on Facebook's chart action, watch the video above.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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