Three Technical Traders Prepare For Facebook Earnings

Three technical traders spoke to Benzinga about how they are preparing for the Facebook Inc FB earnings announcement.

Rod David noted that “December's high filled the gap back to October's high close. The drop since then attacked November's interim low.”

David felt that that the earnings announcement was “not being greeted from a position of strength, and a negative reaction” could cause the stock to fall to the $69.75 or $64.00 level.

On the other hand, a “favorable reaction that gets through fresh highs above 81.50 would all but ensure [the] next probing above $100,” according to David’s analysis.

Jay Wolberg said that Facebook has “shown that they can grow both revenue, earnings, and margins quarter after quarter.” The consensus EPS estimate of $0.48, however, “ is a high bar, but I expect EPS in the $0.50-$0.55 on strong advertising growth.”

Anka Metcalf echoed Jay Woldberg’s comments about how the company “has a history of reporting better than expected earnings.”

Metcalf felt that, overall, the company “is still maintaining a strong uptrend on all major time frame charts and it is right at the point of triggering a weekly buy off the weekly chart.”

If the company reports strong numbers then Metcalf thought it “may run into [the] $82.17 all time high and previous major resistance set on 12/23.”

Metcalf concluded that if the company fails to meet investor expectations then a correction in the stock may bring it into the $73.00 "area of support."

Ahead of the earnings announcement, Facebook Inc traded at $76.82, up 1.37 percent.