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Cup and Handle Breakout in Facebook

July 9, 2012 By Steven Place

After a disastrous IPO, Facebook shares have been in a volatile trading range between 26 and 33. During this time, the stock has formed a cup and handle bottom-- and if the breakout is confirmed may put the bulls back on much better footing.

The main level to watch is a hair above 33. This level has been resistance a few times and is the level that marks the first stabilization after the strong IPO selloff.

The measured move on this cup and handle is about 7 points, so that puts a target of $40 on the stock. That price may be a bit ambitious, but if the buyers can retake the 33 level as earnings anticipation ramps up, there could be some solid momentum into the high 30's.

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