Is it time to friend Facebook (FB)? Yep. (May 27, 2014)
I want to look at Facebook ( NASDAQ:FB ) here real quick. This is a stock that has been really choppy almost since it first started trading. Lately, over the past couple months it’s just been consolidating in a pretty well defined range right here. So if you’ve been trying to trade it, frankly it’s probably been chopping you up a little bit, but I think the trading is going to get easier, because the stock last peaked here in late April around $63.00, $64.00, something like that. Well the stocks back up to that level now only it’s drifting higher. I think this is a stock, now that it’s back above the 50-day moving average; I think it’s on the way to test 70.00.
So what you want to do is, if you want to participate in this, and by the way if it tests 70.00 it may well surpass 70.00 and keep going; I mean this is what the weekly chart looks like, it could easily push through 70.00 and start another leg higher. So what you want to do is, if you’re not long already, take a little bit of stock here. Use the 200-day moving average as you’re reference for stops, so you’ve got to be willing to hold this stock. How many shares are you going to buy at $63.00, that you can comfortably hold even if the stock pulls back to the 200-day moving average and buy some more? That’s what your initial position size is and then as the stock moves higher then you buy a little bit more and increase you position size. Yes you’re increasing your cost basis, but you’re also getting feedback from the stock that you’re right on the trade. So when you’re trading like that you’re going to wind up making money and I think Facebook ( NASDAQ:FB ) is a real good opportunity for you, so check that out.
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