What’s the trade on Facebook (FB)? Depends on your timeframe. You have options! (April 09, 2018)
FB SP-500 FB
We are looking at Facebook ( NASDAQ: FB ). This is a real “newsy” stock because Zuckerberg is going to be testifying before Congress tomorrow and Wednesday so you can expect all eyes to be in that hearing. It should be interesting I guess; but as far as it relates to the stock, honestly, I don’t really think it is going to have that much impact. I may be the outlier here but I can’t see anything really controversial being said tomorrow. I think it is all scripted. It is all well rehearsed. Look for there to be some news headlines on the chyron below the talking heads but for the most part, I think it is just going to be more of the same.
So what do you do with Facebook ( NASDAQ: FB )? Well, first of all, if you are an options trader maybe you trade a strangle on it or something. You basically do a directionless trade. Where you are selling options rather than buy them. For a longer-term trade here is the thing: Go to any stock other than Facebook ( NASDAQ: FB ). You can see on this relative strength line that the stock HAD just been trading sideways. It really hasn’t been an advantage to own Facebook ( NASDAQ: FB ) since July. Since July the stock had been trading upward like so many other stocks. But relative to the S&P ( INDEXCBOE: .INX ), the S&P ( INDEXCBOE: .INX ) was crushing it.
So Facebook ( NASDAQ: FB ) has not where you wanted to be, either on Facebook ( NASDAQ: FB ) or in the stock. And so my sense is if you get an opportunity to sell Facebook ( NASDAQ: FB ) on any kind of rally, do it. Think about it as an investment to the short side. Facebook ( NASDAQ: FB ) isn’t going anywhere but I think that from a longer-term standpoint the bloom has come off the rose here. Any kind of rally, I would be selling into this.
I am not expecting a big plunge in Facebook ( NASDAQ: FB ) but I HIGHLY doubt that the stock is going to be rallying up to new highs. It is one of those stocks that, frankly, I think that you just need to either stay away from or wait and then short it if it rallies at all. That is how I would trade Facebook ( NASDAQ: FB ).
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