• US stocks to begin lower as DE30 hits 4-week low
  • US30 breaks potential neckline in S-H-S formation
  • Facebook called to open higher after record earnings

Stock market bulls have faced a chastening few days with some strong declines this week. The sell-off has gathered momentum in Europe today with the DE30 falling below the 13000 level to trade at its lowest level since early January and the false breakout seen last week now appears to have represented a good reversal signal.

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DE30 has fallen to its lowest level since early Jan and moved back below the 13000 handle. Source: xStation

Looking ahead to the US session, equities on the other side of the Atlantic are also under pressure with the US30 dropping to its lowest level of the week ahead of the Wall Street open. In moving lower the market may have broken a possible neckline in a head and shoulder formation. The market has been trending higher for quite some time now and should today’s break take hold then it could signal a deeper correction. 

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 A S-H-S formation could be in play for the US30 which would signal a sustained move lower. Source: xStation

Despite a broader negative risk appetite for stocks, Facebook is called to open higher by around 1% at 188.88 after reporting its latest trading update following last night’s closing bell. The Tech giant reported better than fourth-quarter earnings and revenue figures on Wednesday with some volatile trade seen in the stock after hours. The numbers are as follows:

  • EPS: $2.21 vs $1.95 expected
  • Revenue: $12.97B vs $12.55B expected
  • Adjusted revenue per user: $6.18 vs $5.90 expected.

 Facebook made a record high at 190 just last week and following the latest earnings release it could have another tilt at record territory. It will be interesting to see how the market reacts to the declines seen in stocks elsewhere with Facebook earlier expected to open in record territory but falling back in the pre-market as indices took a tumble. 

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 Facebook is due to open higher but given the wider declines seen in stocks can it take out its prior high at 190. Source: xStation