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July 21, 2012 / redman59

The Only One Good Thing Related to Facebook $FB

I haven’t been around for many big IPO’s but never have I seen a stock get so much attention such as Facebook. I won’t pretend that I know all the details and how retail got screwed over by the underwriters and how the big/important clients are laughing while starting bonfires with wads of cash. There are many more intellectual and experinced traders that have been on the institutional end and can explain things better. All I do is observe.

From what I have seen this stock gets no repsect. So anticipated and now it is the biggest joke within social media. I have no intention of trading the common but may end up trading options or entering into covered calls, but no outright common stock. With the recent action I remember a comment in a blog post by @RajinCajun Poll Results & Other Notes in which he comments:

“Maybe everybody got it wrong, including myself, when they said Facebook will mark the top of the market, maybe it marks the bottom.
A true costanza market.”

So with the recent action in the market (gauged by the S&P 500), I wanted to look at the price action since the Facebook IPO.

Below is a daily chart since the May 1st high and the selling since.

The other charts below are 30 minute charts of the SPX and Facebook. One thing that I did find interesting too in FB is that the opening range (first 30 minutes) low has held the low everyday in these 3 days it has traded. I expect this one to have continued volume and going forward and a low risk entry would be near/below that low and plan your stop according to your risk. I believe this would be a good entry for a daytrade or swing trade.

With these charts I am just looking at what they are telling and I am not factoring in any news or pending cases that may be coming…just simple charts and data. This stock has too much noise around it for me right now and I will instead at least wait for the options to start trading.

This is just an observation of prices and like @RajinCajun stated, would confirm that this a constanza market. Also I like reading market conspiracy theories and this seemed to fit the bill.

I will say from what I have read from several institutional and market intellects, this story is despising. Its just another reason why people are afraid to put their money in the market; cause when they do they lose on recommendations from their brokers and get to read about their deception. Tread safely.


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