The Facebook stock price has been on a great run and trading just below its all-time high. However, the G7’s new tax initiative could stifle the rally.
Yesterday G7 leaders announced a “historic agreement” to combat tax abuse by multinational tech companies. The seven wealthy countries also agreed to introduce a new global minimum corporate tax rate of 15%.
“I am delighted to announce that today after years of discussion, G7 finance ministers have reached a historic agreement to reform the global tax system,” UK Chancellor Rishi Sunak said of the deal.
Furthermore, the deal would ensure “the right companies pay the right tax in the right places, and that’s a huge prize.”
Former UK Deputy Prime Minister Nick Clegg, now Facebook Vice President for Global Affairs, admitted: “this could mean Facebook paying more tax.”
The news could see the Facebook stock price under pressure when trading resumes tomorrow.
FB Technical Outlook
The weekly chart illustrates Facebook’s incredible performance. Basis Friday’s closing price, the stock has risen +680% since its 2012 listing price of $42.00.
The all-time high of $333.78 was set just over a week ago on May 27th.
Interestingly, A rising trend line from 2015 has been a strong resistance area over the last 6 years. On more than 10 previous occasions, the price has reversed sharply lower from the trend line.
The three most recent touches before the May 27th high resulted in the following reversals:
July 2018: $218.62 to $123.02 (-43.98%)
September 2020: $304.67 to $244.13 (-19.80%)
April 2021: $331.81 to $298.19 (-10.14%)
Ominously, The Facebook stock price is presently just below this important trend.
The first target on the downside is the 50-day moving average at $311.19. Followed by the 22nd of April low at $296.04 and the 100-day average at $289.53.
Short positions should be covered if the price trades above the important trend line at $335.40.
Facebook Stock Weekly Chart
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