Looking for a trade on $FB? Watch how it acts Monday morning. (February 04, 2022)
FB QQQ
Facebook ( NASDAQ: FB ). By the way, you don’t get to stop being what you are just by changing your name. I think Whitey Bulger did that and it didn’t work too well for him. The point is, these guys are still “Faceplant” to me.
In my view, what’s happened here, and it’s kind of representative of the broader market. And that is, nothing against these guys, everything against these guys but I am not going to go there now. What is happening is, it’s kind of like the horse that has been ridden by the bulls for so long, that old nag has kind o petering out, and you can see what’s happening here.
Now, the last couple of times that you have had these big precarious pullbacks like this, think about what is going on in the broader market ( NASDAQ: QQQ ), it’s the same kind of thing, these pullbacks, these were more precipitous though but they recovered. User growth, whatever the metrics are, people that are providing data, was growing. Everybody is getting on Facebook ( NASDAQ: FB ) so this just keeps going, it keeps going up. I am not going to analyze this squeeze in the weekly chart and all of that. What I am saying is, this just kept going higher.
But the thing that I find interesting now is, first of all, why did they change their name? You don’t have to answer that, it is just a rhetorical question. I was just wondering, why did they change their name, and I couldn’t think of a good reason. There are a lot of reasons, we are doing this whole Meta thing, if you are dumpy, if you are this, if you are that, put on the goggles and you are awesome. That whole thing, everybody wants a new world that is totally better, so it seems like a good business to get into. But it just seemed to me that they didn’t have to go ahead and change their entire name, but they did.
What makes more sense to me, is that these guys saw in advance, and we’ve got confirmation of what’s happening from the earnings, and the conference call the other day, these guys saw in advance that people are giving us the thumbs down on our platforms. They are using Tik-Tok and we can’t buy Tik-Tok as we did on Instagram, can’t do that.
One thing about Zuckerberg, he is really, really adept, he’s a genius at kind of capturing trends, just seeing what is going on with people. We are just looking at a true weekly chart here and this is the 200-day moving average. I think they kind of saw the writing on the wall, and to their credit, instead of just saying oh well we will go the way of Bethlehem Steel, they said, we need to get a new gig, we have got to get a new gig.
So they are in the process of rolling out this gig, this new thing. I don’t know what the numbers are if they are even making any money on it yet. But they are setting up a whole new line of business and that is going to ultimately, the belief would be, it is going to send the stock to new highs.
If you talk to Cramer about it, he is such a fanboy of Zuckerberg, this stock is going to be at $1,000.00 in a year. Who knows? I don’t really see it that way but I don’t know. I am not ever going to put on those goggles. And I am never going to drive in a fully self-driving car playing a video game while I let the software program do the work. That is just not the way I am built.
However, let me get to the point, this is a nasty sell-off. I tried to trade this a couple of times yesterday because if you look at this, 3 standard deviations here, 3 standard deviation bands here. This is like a felony, it’s a price felony for a stock to go 3 standard deviations below its mean, which is the 20-day moving average here. It is like a no cash bail, it just gets out of jail really fast. It didn’t do that yesterday,
I will be honest, I was kind of expecting it to, knowing, though, that because the miss was so bad and so many institutions are in this stock, the supply could be much, much greater than the typical supply that you would see when a stock opens up so bad like this. It is like all the supply, boom, gets rid of it at the open, which is why the stock is down so much. But then, within minutes, the stock will snap back the other way, so I was kind of looking for that.
I put a couple of trades on and immediately got stopped out, I didn’t do anything today on this. But with that said, this is kind of looking to me like it could be kind of a 3 candle reversal. We get this one here, the first one, a big sell-off here. Then today, we get a lower low and a lower high so this is still going down, so advantage bears, but it closed higher than it opened so that is a good thing. It indicates that during the day, at some point, the power shifted from bears to bulls.
And so it kind of leads me to wonder whether Monday we are going to see this kind of thing, we are going to see this move higher here. So this is what I am looking for, I am looking for the stock to stay above today’s intraday low, which was 230.00. So I am looking for it to stay above 230.00 and then ultimately eclipse today’s intraday high, which is 242.61. If this stock starts breaking out above today, not Thursday, if it starts breaking out above today’s intraday high, that is when I think you are going to see a meaningful snap back. How much? I have no clue, I just take them one tick at a time on stuff like this.
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