Are you friending or unfriending Facebook (FB)? Depends on your timeframe. Here’s your trade! (May 03, 2017)
FB
We are looking at Facebook ( NASDAQ:FB ) here. By the way for members, I am covering a lot of stocks that are in Phase 2, which I will explain here on Facebook ( NASDAQ:FB ). First, the company reports earnings and they seem pretty good to me, but nobody cares what I think about earnings. What they care about is what the market thinks. It is just so interesting how you hear fans cheers and jeers of a company based on the same information. That is why they say it takes two to make a market. With Facebook ( NASDAQ:FB ) here is the deal: Long-term, of course it is in an uptrend. Long-term, of course you want to buy Facebook ( NASDAQ:FB ), right? That is great. Decision and action. Your decision is you want to buy Facebook ( NASDAQ:FB ) for the long-term.
By the way, if you don’t have a long-term view of this then don’t buy it. It isn’t that great. I have a marketing account on Facebook ( NASDAQ:FB ), you are not going to see me friending you, showing you pictures from my vacation or something. I am not a Facebook ( NASDAQ:FB ) fan but a lot of people are, which is why the stock is at $151.00. It started off, lets just say, a lot lower than that. Even at the open, where it opened up at, people took at bath, over 50 percent. Of course at the time I was jeering saying how it was a big fad and all that, so we obviously know that I am a late adopter so you can’t listen to me on that. But what you can do is listen to me as far as when you should actually be buying this stock.
Again, it is on a weekly chart here. We look at the daily chart, I have got these buy signals where they are just here, I talked to our members about this while Facebook ( NASDAQ:FB ) was working. You don’t see me having a buy signal here and I am not going to put a buy signal here. Phase 1 is, first of all, got to have a squeeze. This is a kind of squeeze, volatility wasn’t THAT tight. This was tighter here. So the stock breaks out, that is Phase 1. Now, when a stock has run up as much as it has in a short a period of time as it has, for Facebook ( NASDAQ:FB ), 7 percent, not a huge move, but for Facebook ( NASDAQ:FB ) it was a big move. When it has run up this much BEFORE the company reports earnings how much more do you want out of it when they do report earnings, out of the stock not the company? What is it going to take to get buyers to come in, MORE buyers, more eager buyers than bought it here? Answer: More than Facebook ( NASDAQ:FB ) had to offer.
So just as a matter of principle, when a stock moves up like this before they report earnings don’t be a fan and say, “Oh I know they are going to blowout earnings. I know they are going to go even higher.” They generally don’t do that. So look at this, check this out after hours. Here is a 5-minute chart. Wow! The stock went clear down here to 145.00 and now it is up to 148.00. Here is my buying opportunity, right? Maybe so, but this is the way I am looking at this chart. I see a whole bunch of red from here down to here, assuming the stock trades right here. So even though you are buying it here you have got a lot of supply to chew through to from people who were kind of the last comers, the kind of the weak hands who bought the momentum. They are going to be selling this, and they are going to be happy to sell it if you want to buy it.
On the other hand, you have got the dip buyers. They are not buying it here at $148.00. They are considering it here, maybe even at the 50-day moving average. Why? Because the stock doesn’t come there that many times, it doesn’t do that that many times, and at the very least it is going to fall to the 145.00 level, this middle Bollinger Band. Not too many people trade off of the middle Bollinger Band, it is a 20-day moving average. It is just a way of keeping track of where a stock is relative to the average price. And right now, it was WAY up here relative to the average price. Again, for the way Facebook ( NASDAQ:FB ) trades. Now, it still not back enough.
So I would stay away from Facebook ( NASDAQ:FB ) tomorrow. But here is the thing: I absolutely would not short it. Because there are a lot of fans of Facebook ( NASDAQ:FB ) and unlike Tesla ( NASDAQ:TSLA ) they actually do make money. But that is just me talking. I like it when a company makes money.
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