Some thoughts on Facebook (FB) (April 27, 2015)
I want to just look at Facebook ( NASDAQ:FB ) because this is a stock that is in a volatility squeeze. The company reported earnings, they seem pretty good to me, but nobody really cares whether I think earnings are great. What we care about is, what’s the stock doing? The stock initially went up but did not get even close to breaking out; it just immediately fell back.
This is not a stock that you want to be buying on a breakout; it’s just not. All these breakouts have ultimately been fakeouts, but it is a stock I think you can hold. Look at the weekly chart, you can see this has just been drifting sideways for so, so long, but the uptrend is intact. You look at the 200-day moving average, it’s working.
So what I would suggest doing is this: use this little pullback over the last couple days, meaning Thursday and Friday, as a buying opportunity. A lot of selling happened today, Facebook ( NASDAQ:FB ) was not one of them. The stock held a bid, it was up half a percent, and stayed above the 50-day moving average.
I would suggest that you consider taking the stock right here on this pullback. Look at $80.00 as a very, very viable support level and know that you’ve got the risk essentially taken out of this stock, because the company’s already reported earnings. I guess you could look at Twitter’s ( NYSE:TWTR ) earnings report tomorrow and say that could be some kind of a catalyst for Facebook ( NASDAQ:FB ), but is it really?
Facebook ( NASDAQ:FB ) just reported earnings last week. What’s at Twitter’s ( NYSE:TWTR ) going to tell you about Facebook ( NASDAQ:FB ) that you don’t already know? Anyway, I look at this as a buying opportunity in a stock that’s really just kind of trending nicely after a very long period of consolidation. So you’re buying this stock close to the 50-day moving average and then hoping that Facebook ( NASDAQ:FB ) friends the bulls.
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