Monday, January 12, 2015

FB Facebook Weekly Chart Rising Wedge Negative Divergence

The last Facebook chart about one month ago was looking for a topping out for this social internet fave and the chart is in uniform negative divergence with the last price high two weeks ago. The rising wedge and neggie d creates the spankdown. Price has moved sideways through the 72-80 channel for the last one-half year. Bulls will win big above 80 and bears will win big under 72. Price is at 77.74.

The critical 20-week MA support is 77.06 and price has honored this level in the past. If the 20-week fails then the 50-week MA at 70 is on the table. The rising 50-week MA is forming a confluence with the multi-month horizontal support at 70-72 so price may seek this level to make a bounce or die decision. The volume continues to trail lower for the last 18 months. The MACD cross is negative.

The expectation is for FB to sell off moving forward through 2015 and the collapses from rising wedges can be quite dramatic. FB can be shorted here and if price comes back up to the top of the channel and rising wedge at 80-ish that would be a gift for short-sellers. If you are a long-time investor of FB and enjoyed the ride it is prudent to take the money and run. Keystone does not have a short on in FB but may initiate a position this week. Facebook is forecasted to perform a faceplant in 2015. Recent price buoyancy is due to the higher perceived valuation in Instagram but that joy appears to be fully priced in. Send an email to Mark Zuckerberg and ask him, "what else you got?" 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 2:38 PM: Zuck slipped on a banana peel with FB at the lows of the day down -2% at 76.22.

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