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Facebook is getting crushed. The technician who called it says this is the next level to watch

Facebook hits an all-time high ahead of earnings, and there may be more highs ahead
Facebook hits an all-time high ahead of earnings, and there may be more highs ahead

Facebook went from record highs one day to just about a bear market the next.

Its shares were crashing Thursday a day after the company warned in a post-earnings conference call of higher spending and decelerating revenue growth in the back-half of the year.

Mark Newton, technical analyst at Newton Advisors, had predicted a decline was coming.

During a appearance Tuesday on CNBC's "Trading Nation," Newton said Facebook could see a major drop come quickly. Even if one occurred, he noted, Facebook shares would still be above its long-term trend.

"The stock now is up about 35 percent off its longer-term trend line just from 2013," Newton said Tuesday. "It could actually correct 30 percent and still be in an uptrend so from a risk-reward perspective, it's not the best buy right here. I do think upside is limited."

Newton predicted a pullback into a correction, or even a bear market, could happen in the fall. Instead, a massive decline came months earlier — two days later. Its shares plummeted Thursday after hitting a record intraday high during Wednesday's session.

Facebook was flirting in and out of bear market territory on Thursday. By late morning, its shares were down 19 percent from its 52-week highs, a hair shy of the 20 percent decline which marks the threshold. However, its daily move 19 percent lower Thursday puts it past the 10 percent decline that indicates a correction.

"The stock is likely "dead money" near-term given today's trend break on very heavy volume," Newton said in an email to CNBC on Thursday. "While oversold rallies can occur into late August I feel that we'll likely see further consolidation and the stock settle this fall near $160 to $165 area."

Facebook shares are still a nearly 9 percent decline from $160. It has not seen those levels since late April.

"I feel that $160 to $165 area should mark a support range to buy the stock for intermediate-term purposes technically on any further weakness into early August and/or into the fall," Newton added.

Facebook reported a bottom-line beat in its second quarter, but fell short on revenue expectations even as sales rocketed 42 percent higher. The company warned that its sales growth rate could decline by the high single-digit percentages in coming quarters.

Note: This article has been updated to reflect Facebook's sell-off on Thursday.