Summary:
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US indices trading in the green
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US500 bounced from key 2918 level yesterday
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Facebook called to open lower
The week began with a sizable gap lower for US indices but they recovered throughout Monday’s session with the US100 leading the way back. The US100 swiftly filled its gap lower from 7558 and the US500 has come within a whisker of its close last Friday at 2934.3 in the last couple of hours. The 2918 level provided some good resistance on several attempts to rally earlier this month but a decisive move above it on Thursday saw a prompt 28 point rally to a new all time high of 2946.7. The move back lower yesterday found some support around the prior resistance of 2918 and longs were able to defend this level and send the market back up higher.
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Open account Try demo Download mobile app Download mobile appThe US500 remains well supported above the 2918 level and unless price falls below there then last week’s break remains valid and the path of least resistance remains higher. Source: xStation
One of the US500 components, Facebook, is making the wrong kind of headlines this afternoon with the stock expected to open lower by around 2%. The declines in the pre-market come after reports that Kevin Systrom and Mike Krieger are set to leave Instagram, six years after the founders sold the app to Facebook for $1B. Facebook has adopted aggressive tactics to competitors in the social media space since its IPO and has often bought them out. The concern for investors appears to lie in the people behind the success jumping ship and this latest development with Instagram comes not long after Whatsapp founders Jan Koum and Brian Action quit earlier this year over the Cambridge Analytica scandal.
Facebook shares bounced on Monday from close to a 5-month low, but the stock is expected to begin this afternoon in the red. The market remains in a downtrend following the huge 20% drop seen after the latest trading update when the company delivered a surprisingly downbeat assessment of its future prospects during the summer. 159 a possible support level to keep an eye on. Source: xStation
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