BCB May Reinstate WhatsApp Payments; Facebook Share Price Leaps

Facebook share price activity is showing a mild reversal after initially opening lower on the day. After a significant fall yesterday following a rapidly growing advertising boycott by big names, Facebook’s share price opened lower and looked like it would extend the decline today. However, positive news from Brazil concerning its messaging service seems to have reversed the flow. 

Banco Central do Brazil (Brazil’s central bank), which had suspended WhatsApp’s newly launched payments service on Tuesday, said today that it would find a way to work with VISA and MasterCard to restore the payment service in the country.

Antitrust concerns led regulators to suspend the service by blocking partnerships WhatsApp had signed with Cielo, MasterCard and VISA to process card payments on the platform. Cielo is Brazil’s leading card acquirer with more than a third of the market share, and regulators were concerned that a potential boost of Cielo’s card transactions by 10% using WhatsApp could create a market monopoly.

This news is a welcome relief for Facebook’s investors, who were rattled at the growing campaign to boycott its advertising platform over concerns of inaction on posts that bordered on racism and hate speech. 

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Outlook for Facebook Share Price

Facebook’s share price is currently trading at 235.74 or 0.73% higher at the time of writing, which partially reverses yesterday’s 3.39% drop. The stock continues to trade close to record highs, but the formation of a rising wedge pattern on the daily chart could have bearish implications for the Facebook share price activity. Today’s bounce occurred off the wedge’s lower border, which connects the price lows of 14 May, 15 June and 24/25 June 2020.

The lows of yesterday and today are located at 232.74. The intraday lows of 2 June and 16 June, as well as intraday highs of 1 June and 11 June, reside here as well. Therefore, this price is a critical price level. 

A breakdown of this price also leads to a breakdown of the wedge, allowing Facebook share price activity to aim for the next support target at 223.11 (lows of 20 May and 11 June), with the 218.28 price level coming in close as a potential downside target if 223.11 gives way. The 5 Feb/20 Feb lows of 208.29 would be a possible price project point which completes the measured move from the wedge breakdown. 

On the flip side, the 26 May and 10 June highs at 241.04 remain an upside target for the price bounce of today, as Facebook share price action attempts to reach the opposing wedge border. 245.19 remains the all-time high set on 23 June 2020, and a break above this price takes the stock to new record highs. This move also breaks the wedge to the upside and invalidates it.

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