Lots of "likes" for Facebook stock recently – will it continue?

April's trendline break couldn't sink FB for good – which emboldened the bulls. July's rally peak couldn't eclipse the broken trendline – which has the bears smiling. At this point with FB, something's gotta give! At any point in market history, one could identify a handful of stocks that have truly captured the market's imagination and that are a reflection on what's going on in the world. Right now, FB (along with several other social media leaders) is one of those stocks. What the bulls are seeing Pretty much since the bears failed to follow through on FB's trendline break in early April, the stock has been in true “leader” mode – running nearly 50% to the upside in the process. After making new all-time highs in late-July, the stock gapped up for several more points before beginning a pullback / consolidation phase. Now, after the stock basically filled the gap that occurred in Late July, the bulls are feeling that FB has refilled the tanks and is ready for take-off once again. This feeling of theirs is supported by the fact that the stock is no longer overbought according to two popular oscillators – the Williams %R and the RSI indicators. So the bulls are saying, “What do we do in a bull market? We buy dips!” This would seem to be a dip worth buying – at least in their eyes. What the bears are seeing What's left of the bearish crowd in Facebook is quick to point out that FB experienced an exhaustion gap in late July which took the stock right up to the underbelly of the trend line that was broken in April. “What a perfect spot for a top”, they are positing. At least a healthy pullback, if not a complete reversal of fortune to the downside, is in order for FB shares according to the bearish cabal. Even the middle of the road type of bear in this stock sees it moving back down to the $68.44 level (a Fibonacci-generated projection). So, who will claim victory in this FB face-off? As long as the market is friendly to the bulls in general, it is difficult to imagine FB getting hammered too badly. However, a pullback from the mid-$70s to $68.44 would hardly qualify as the stock getting hammered. Rather, that would be a relatively healthy consolidation of the 40%+ gains that occurred from April to July. In that case, both the bulls and bears – as outlined above – may be proven correct in their theses. How to trade FB from here? Aggressive and nimble short-term traders can short FB at current levels with a stop-loss in place on any close above $74. If $74 is conquered on the upside on a closing basis, the “continued pullback to $68.44” bearish theory is likely not going to come to fruition according to technicians. For those looking to go long of FB stock, the technicians would tell you to try to buy a dip in the stock down to the aforementioned extrapolated “correction support” at $68.44. However, if FB closes above $74, they say to go ahead and look to buy as close to $74 as possible for a run to new highs north of $80. In that case, however, they note to use a stop loss on any close back below $74.