Thinking of friending Facebook (FB)? Here’s your trade. (June 28, 2016)
I want to look at Facebook ( NASDAQ:FB ). We got a big bounce today in the market. After two nasty days like we’ve had we’re kind of due for an oversold bounce. By the way, we’ve still got a lot of resistance here. You’ve got to look at this, there’s a lot of resistance, a lot of supply for the bulls to chew through in order for this to get up to new highs. Nobody knows for sure except the liars and the fools. I’m looking at this kind of thing just because of all the resistance here, a lot of resistance there. But anyway, one of the stocks that I wanted to look at, I figured I’d look at it here in the Free Chart video, is Facebook ( NASDAQ:FB ).
If you look at the weekly chart, the 40-week or 200-day moving average is the red line here, this has actually very few tests of the 200-day moving average. We’ve got a couple of them here, we’ve got a nasty one here. I’ll bet this was on August 24th. How do I know that? Because EVERYTHING fell that day. We got these tests here and now we’re back here. Any of these tests, if you bought at the 200-day moving average or even a couple days afterwards you’re still up. This is a weekly chart, by the way. But if we look at the daily chart, you’re buying these tags here and just holding, you’re still good. Here, Wow! The 24th, who knew? You bought here, again a of couple days, two or three days and then ultimately you’re still higher. You’re higher, wait a few days, you’re still higher. So this doesn’t quite get down there.
What I would suggest is, if you want to own Facebook ( NASDAQ:FB ) now is your chance, because the other social media stocks are kind of starting to perk up a little bit as well. This is a stock that you can own; you’re late, nice to buy it at the IPO, but you just keep a stop a little bit below that level. That’s an acceptable loss. You start taking the stock, if it pulls back a little bit more, fine, go ahead and buy some more because it’s still in an uptrend, the stock is trending higher this way. So the stock is in an uptrend, you’re buying the stock as close to the 200-day moving average as you can. And then if the stock starts trading below and CLOSING below the 200-day moving average, then you know, well as Carl Spackler says, “That’s all she wrote.” So anyway, as long as this is staying above the 200-day moving average I think you’re good to go.
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