Wednesday, May 23, 2012

FB Facebook Daily Chart

The technical analysis for FB remains too far in its infancy to be of value yet but the moving averages and chart patterns are beginning to take shape for the very short term time frame.  This is a 10-minute chart so each candle represents 10 minutes of trading time from the Friday open at 11:30 AM when the Faceplant debacle begins.  Support and resistance lines are lining out along whole number increments which is not surprising due to its new issuance, as well as the whole numbers representing levels of defense by the underwriters.  The FB bulls can hang their hats on the positive divergence in this very short time frame so the laggard may finally receive a breather. Remember, however, this is a very short term time frame. After a recovery move, price can fall back into the same pickle and print lower.

Pre-market FB is at 31.55, so the positive divergence may bounce it, but the MACD line and stochastics are slightly weaker so a lower print should occur before it can mount a more substantial move towards 32 and 33. Technical analysis cannot tell much as yet, but a flat to sideways up move should occur over a couple days and then price can decide if another down move is coming. Keystone's 80-20 Rule says price seeks to move from 80 to 20 and also from 20 to 80.  Thus, when 32 was breached, 28 is a target.  31.20 should lead to 30.90, the LOD yesterday was 30.94 not yet achieving this target.  FB is probably not worth looking at until it prints 27.70-28.20. If it recovers before then and heads higher, good for all the FB holder's but it is a stock not worth chasing at this juncture.  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.
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4 comments:

  1. JMay 23, 2012 at 9:34 AM

    Mr. Keystone:

    Could you briefly explain your 80-20 rule. I can't seem to figure it out.

    Thanks,

    J

    ReplyDelete
    Replies
    1. Keystone SpeculatorMay 23, 2012 at 10:56 AM

      Hello J, no mister's are necessary around here, Keystone had to look over his shoulder thinking you meant soomeone else.

      When price moves up, and closes above the 8 level this typically leads to the 2 level, or the 80 level to the 20 level. Some examples, say a stock closes above 33.80 at 33.84. This would mean there is a good chance it will see 34.20 (80 cents up to the 20 cents higher for the next increment). Or 8.85 would lead to 9.20. or 1.28 would lead to 1.32. Or 45.68 would lead to 45.72. Or 38.05 would lead to 42.20, etc... In revese as price falls thru 20 a similar projection should be kept in mind. Use the 8's and 2's in the cents positions and dollar positions. It is amazing how often that the price action in any stock or index, or ETF, tends to follow this guideline.

      Delete
  2. AnonymousMay 23, 2012 at 11:20 AM

    KS, then if I am understanding you correctly, SH at $38 today is headed to $42 Thanks Dale

    ReplyDelete
  3. Keystone SpeculatorMay 23, 2012 at 11:48 AM

    Hello Dale, yes, remember, howeve, it is only one tool in the tool box. SH is printing 38.39 now. This would hint that 42.20 is coming. You can watch the smaller incremental moves with first watching to see if there is a close above 38.80. If so, that should lead to 39.20 to keep the upward move chugging along towards the 42 goal.

    On the tiniest level, if it prints say 38.58, that would lead to 38.62 in the VST time frame, four cents.

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