Shares of Facebook, Inc. fell nearly 7% on Monday following disclosures of a privacy breach that affected an estimated 50 million users. The controversy raised calls for a Congressional investigation, while the United Kingdom may issue subpoenas to locally based Cambridge Analytica, the company cited for the incident. The news adds to growing concerns that the social media giant is doing a poor job of insulating its massive customer base from political manipulation.
Unfortunately for bulls, four-month price action is carving the right shoulder of a possible head and shoulders pattern that will issue major sell signals if the decline breaks neckline and moving average support, now located in the mid-$160s. In turn, that would favor continued downside into the $130s, shaking out a large supply of shareholders who haven’t had to deal with a major decline since the summer of 2015, when the stock fell more than 25% in a month. (See also: Facebook Shares Fall After Data Leak Bombshell.)
Facebook may succumb to growing controversy, completing the last stage of a head and shoulders breakdown that targets the $130s. …read more
Read more here: Facebook Stock May Complete Head and Shoulders Top