FB FaceBook Daily Chart Cup and Handle (C&H) Patterns

FB surprised the analysts last evening with blow-out earnings and gains in mobile advertising. The stock should pop to 30-33 today. Last year we monitored the C&H during August through November. The blue lines show the initial C&H back then that failed to breakout. It formed a double handle and the lighter lines show the overall C&H.  A base of the cup at 18 and breakout line at 23, or 24, targets the 28-30 level which was achieved as this year began. The price action over the last two years, since the FB IPO disaster hit at 45 in May 2012, is now showing a much larger and textbook style C&H. The base of the cup is 18 and breakout line at 32-33. This yields a target of 45-49--the IPO price, if price breaks up through the 32-33 level.

The thin red lines for the indicators are all negatively sloped, however, not negatively diverged since price has not made a high above the price two weeks ago or six months ago. This changes today since price will leap to test the prior highs from January. This price match and higher action will lock in negative divergence for the indicators and the thick short red lines will likely verify the short term negative divergence. Thus, the chart is not particularly enthusiastic about breaking out above to satisfy the C&H upside targets as yet. Price may sneak above but the projection would be for more of a sideways move through 28-36 moving forward for the weeks and months ahead. The confirmed breakout above the C&H line at 32-33 may not occur for a few weeks or months, however, you never know. Perhaps the positive data last evening will be a game-changer and encourage more lofty prints.

Projection is lots of sideways ahead for FB after it jumps to the 30-33 area today. The breakout for the C&H should occur but it may be a few weeks or months away. Price should return to the IPO price but it may take a year or more. For long term holders, it appears that patience is required but price should return to the IPO price in the future perhaps in 2014.  This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 9:44 AM:  FB catapults higher at the opening bell now printing 33.06 up a huge +28%. The HOD in these opening minutes is a spike to 34.96. As shown above, price is now testing the breakout line of the C&H at 33-ish.