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Facebook might see a major breakout after cracking this level

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Facebook faces a crucial test at these levels

Facebook just broke above a key level, and this could be a signal for more gains.

The tech giant's shares on Tuesday topped $172, which in recent months has been a key level of resistance. Each time the stock has reached that level since September it has subsequently retreated. But this time may be different, one chart watcher says.

"The chart looks pretty good," Miller Tabak's Matt Maley said Tuesday on CNBC's "Trading Nation." "It's bumping up against that level [$172]. ... It needs a little bit more upside support follow-through, but if it can finally break away from that, it's going to be quite positive at least over the short to intermediate term because it will attract the kind of momentum money that it hasn't seen in more than six months," he said.

After examining the stock chart, Maley notes that the performance is forming an ascending triangle pattern, which is a bullish indicator.

Maley cautions about headline risk for the stock — particularly because of growing calls for regulation of social media and as the next presidential election approaches.

"I mean this whole thing with regulation has got me very concerned, and that will be a bigger one as we move into the second half of the year," he added.

Facebook has been caught in the political crosshair after a series of privacy scandals over the past year, and the company is currently under investigation by the Federal Trade Commission, the SEC and several other domestic and international agencies. On Saturday, CEO Mark Zuckerberg said he is in favor of tougher regulation, particularly when it comes to users' privacy.

Despite regulation uncertainty, Facebook shares have bounced back since the slide at the end of 2018 that hit the tech sector and broader market. The stock is up about 42 percent from its December low, although it's still about 20 percent from its July all-time high.

The stock rose more than 3 percent on Tuesday after Deutsche Bank released a note saying Facebook-owned Instagram "could add an incremental $10B of revenue in 2021." Analyst Lloyd Walmsley has a $200 target on the stock, which is about 15 percent higher than its Tuesday close.

S&P Global's Erin Gibbs likes Facebook here because she believes the company's acquisitions will continue to drive growth, but also because she thinks much of the headline risk is already priced into the stock.

"I think what we're really seeing is now more analysts are looking at some of their [Facebook's] acquisitions, particularly Instagram, [which] really is seeming to pick up the pace. This is the new area where we're seeing a lot of potential growth," she said on "Trading Nation."

While she agrees with Maley that the company is facing many headwinds, she argues that the risk is already priced into the stock since valuations remain "fairly depressed."

Facebook currently trades at 22 times forward earnings. By comparison, Netflix and Twitter trade at 78 times, and 37 times forward earnings, respectively.

"We're starting to see more positive momentum around the name, and we think it's a safe bet here given that most negative news is already priced in," she said.