FB Facebook Monthly Chart; Overbot; Rising Wedge; Negative Divergence; Upper Band Violation; Price Extended

The FB monthly chart was posted the last couple days of the year so now there is a January candlestick. Very interestingly, the chart is cooked on the monthly basis. This is a big deal. These highs in Facebook in early 2018 are likely the highs for many months even potentially a year or two or more ahead.

And right on cue, CEO Zuck decides to revamp the news feed and alienate advertisers and users. Zuck was sleeping through Business 101 that teaches CEO's to not bite the hand that feeds them and that they had better dance with the girl they came with. The January candle show price popping to 188.90 but retreated with the mini-crash on Friday now up a smidgeon +1.7% on the month.

Price had already violated the upper standard deviation band and needs to show the middle band, also the 20-month MA, at 147.14 and rising, some respect. The red rising wedge is bearish. The overbot RSI and stochastics are bearish. The red lines show universal negative divergence across all indicators wanting to see a spankdown on the monthly basis. The ADX is below the levels from 2015 indicating that the upside trend is not as strong as it was back then. Price is extended above the moving averages requiring a mean reversion lower.

The brown circles show distribution months where the smart money is handing off shares to the dumb money. This occurs as the market euphoria and optimism increases. Joe Sixpack is getting caught up in the stock market joy and is running into FB stock like the pundits recommend on television. The smart money dumps shares as the dumb money floods into FB on the hyped up news. This creates the higher selling volume. That's the smart money sneaking out the back door saying, "See ya lata, sucka."

So if you are Timmy Tech bragging around the water cooler each day that you own FB stock, you may want to rethink that approach. Pull out your trumpet and play "Taps" for Facebook this year. Facebook can be shorted going forward. FB will likely stagger sideways with a negative bias for the entire year forward. 140 to 160 should be on tap this year. Zuck will be crying in his cafe latte. Keystone is not short FB but will look for an entry going forward. The FB weekly chart received a neggie d spankdown of -4% last week.

Facebook is the first of the FAANG stocks that rolls over this year. By the looks of the monthly charts, the next will be Apple, then Google, then Amazon and Netflix as the year plays out; FB, AAPL, GOOGL, AMZN and NFLX, respectively. 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.