Wednesday, January 1, 2014

$FB into the New Year

Happy New Year to everyone out there.  I haven't posted in a while. Been getting through the holidays and spent a lot of time adjusting some strategies that weren't working.  I thought I would start out this new year with a post on $FB

I have been spending a lot of time watching the posts scroll by in the $FB stocktwits page and have seen some really interesting stuff. Lots of pumping and bashing as well. Cheerleaders will cheer for a team even if they are down by 10 touchdowns at the half. Just part of the whole psychology of the market. Either way, I have a less then bullish outlook for the near term on it. I followed it down last week via puts and did very well.  I rolled some puts over to this weeks 55 strike at .36. Up over 100% on these so far and held them though the holiday.

Basically, if you look down at my chart, I am looking at a cup and handle pattern for the most part.  The cup formed for 8 weeks and then made a very short handle. Almost a no handle, cup and handle pattern. Dec 23rd gave way to a large breakout. But couldn't hold. Two days later, it sold off and continued until it broke back down into the cup on rising negative volume.  At this point, I am not trading on the cup and handle pattern since I look at it as a failed pattern. Any chance to break back to new highs will need to base and consolidate first.  There is only roughly a 2.5% short float so a squeeze isn't part of the equation.

Tuesday saw a brief relief day but without closing back above the top of the cup, and volume being half of the daily average, conviction seemed to be missing. Right now, I see $FB needing to test the 50d sma before it can try and based.

Hope everyone had a wonderful and safe New Years Eve. See you tomorrow and happy trading.

Follow me on stocktwits @JrsyFightsJosh

No comments:

Post a Comment