Conclusion: I am BULLISH Facebook stock $FB but “SEE” a corrective period coming from the levels we currently sit at or from just a bit higher. Should be a nice place to take some profits.
No need to read any further UNLESS you are on the journey of MATH and GEOMETRY in the markets.
If you have a slight interest in form, proportion and geometry then take a look how $FB is aligning “perfectly” to the Andrews Pitchfork (AP)
Typically we use the AP by connecting 3 points. I like to use the AP aligning the third point with ZERO PRICE. That, my technical friends, will align the “primordial” INITIAL IMPULSE MOVE with the vibration of any particular liquid and tradable security…
So, from the Facebook IPO date, you’ll see the three boxes that I used to align the vibration of $FB to the upward march.
Now, just like a “projection” technique you’ll realize that it’s NEVER a 1-1 correspondence. Most, if not all, charting packages will allow you to “adjust” pitchfork lines to the median. In this case, I used .618 (red lines) and you can see that it caught EVERY move higher and lower for Facebook stock. The most recent move below (blue shaded rectangles and blue arrows) was an EXACT MEASURED MOVE of the biggest corrective move since the IPO.
Here’s a good resource with lots of information on measured moves.
So, if you look at the posts mentioned above you’ll understand that we are a pretty demarcation point for $FB. If we BLOW THRU the 116 level then we have hit a parabolic extreme that SCREAMS caution. If we tag the high most recently mentioned or 116 and get an orderly pull back then this puppy will continue the march upward.
I realize the entire world is LONG $FB… but what I see is an extended move that is begging for an orderly correction. A parabolic lift off would be GREAT for traders but would ultimately crash this stock.
So far, it’s an orderly and powerful advance… let’s see a harmonic and proportional move lower so we can comfortably get long Facebook stock. Thanks for reading.
Related reading from Bart: Google (GOOGL) Beats Earnings: Higher Price Targets In View
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
