How to Trade Facebook Stock as Companies Boycott Advertising


Facebook remains under pressure as companies line up to boycott the
company`s ad platforms in July.

Facebook (FB) was hammered on Friday, falling more then 80%.
On Monday the selling pressure continued,with shares down about 1%
although bulls were able to bid shares up off the lows so far.


The broader market decline over the past few sessions hasn`t helped matters.
However, Facebook is under heavy pressure as more companies begin to boycott its
advertising platforms in July.

So far, some of the boycotting companies include Ben & Jerry`s, Coca-Cola,
Starbucks and Honda. In total, more then 160 companies are involved.

That`s going to be a top-line issue for Facebook and to some extent. Twitter as well.
while Facebook suffered a large one-day hit, the stock is holding up pretty well so far.

Facebook and Starbucks are holdings in Jim Cranmer`s Action Alerts PLUS member club.

Trading Facebook Stock

How to trade facebook stock

Friday`s loss was an avalanche of high-volume selling, with Facebook stock breaking
below $225. This mark was significant. it was resistance in January and support in may and June.

Once support gave way, the stock traded down to the 50-day moving average, before gaping below
this mark on Monday morning. Trying to reclaim this metric now,it will be interesting to see whether
it acts as resistance.

If it does, it puts the $200 mark in play.Not only is this level psychologically relevant, but
it was also in post-earnings support in late April and may. Further, the 100-day and 200-day
moving averages are near $198.

This should make the $200 area a strong support zone if Facebook stock declines that far.It may at least
be good for a buy the dip bounce trade.

On the flip side, let`s Facebook reclaims the 50 day moving average. It then puts the
$225 level back in play. It would be quite bullish to see Facebook stock reclaim this mark.

It puts the 20 day moving average back on the table currently near $230 followed by resistance at $240