By Stephen Ong, Senior Account Executive, Phillip Futures
Did you know that CFDs in shares allows you to trade in both bull and bear markets, and is a good tool to use in times of market volatility? Share CFDs also have a minimum tradable size of only one share on Phillip MetaTrader 5, making them highly accessible.
This week, let’s take a look at the technology sector for some share CFDs that might be worth considering – Facebook (FB), and Tesla (TSLA):
Facebook (FB) at record highs ahead of holiday Monday
Facebook’s shares have rebounded recently together with most tech stocks while the Nasdaq catches up to the broader equities market. The Fed’s reiteration that inflation is ephemeral has benefited technology and high growth stocks as they recover from a previous pullback in mid-May. Facebook’s stock price has now risen firmly from the $300 support zone and broken previous record highs of $331.68 (29th April) to form a new all-time high at $333.71 on the 27th of May. Facebook finished Friday at $328.84.
Facebook (FB) stock technical analysis
FB shares opened higher initially after a strong earnings release on April 28. Earnings per share reported a 40% gain at $3.30 versus a market consensus estimate at $2.35. As a result, Facebook shares spiked 7% post earnings release and a nice gap was formed on the FB stock chart. However by May 10th, FB had effectively given up its prior gains due to profit taking, closing the gap.
Moreover, the Relative Strength Index (RSI) and the Stochastic has also signaled a sell-off with both the momentum oscillator entering overbought territory on 29th April. Facebook eventually found strong support around the 300-day exponential moving average (EMA) zone at the $300 price level. The key level traders are looking at now is whether FB can remain above the 50-day EMA at $324.51.
A price break of 50-day EMA at $324.51 could possibly result in a pullback to support at $315.57, and then the 300-day exponential moving average support at $308.60. Further price action at this level may once again test the support zone at around $300.
The RSI and the Stochastic have been greatly influenced by the recent price rally, and remain firm in the overbought zone. Similarly, the Moving Average Convergence Divergence (MACD) indicates strong upside momentum as it remains above the signal line.
Tesla (TSLA) technical bounce stalls between 50- and 300-day exponential moving average hourly chart.
Last Friday, TSLA shares pullback as it closed at $625.32 due to profit taking. Since mid-May, Tesla shares have been steadily climbing after bottoming out around the strong $544.00 support region. Overall, the technology sector had rallied as concerns about US inflation abated. In a span of about two weeks, Tesla had advanced from $544.82 to $635.10 on last Friday.
Tesla (TSLA) stock technical analysis
Tesla is now in the consolidation phase as it ponders it next move. The stock has gradually craw back some of it losses in April as it seemed to be heading straight from $544 support zone given the down trend from the first half of May. It is now at a crossroad, TSLA needs to break above $683.45 for the chart to continue its bullish run and put an end to its bearish downtrend in April.
The Stochastic (Stoch), Relative Strength Index (RSI) revealed that Tesla has fell into oversold territories in mid-May had flagged a minor turnaround in stock price. As a result, the momentum oscillators showed that Tesla shares broke out of the downward trending 20- and 50-day exponential moving average (EMA) in mid-May and tested 635.10 last Friday.
However, the major downtrend is still in continuation unless $683.45 is breached. A break below 50-day EMA at 610 may reaffirmed that the major downtrend is intact and may target the strong support zone around $544 near term.
Stephen Ong is a Senior Account Executive with Phillip Futures. With over 20 years of experience in the CFD, Forex, and Futures markets, he offers actionable financial insights on multiple asset classes and how best to implement a successful trading plan on market view.