Facebook Still Looks Ugly

Facebook has been a “S*!# Show” since it IPO back on May 18. All it’s done practically is go down. Its had a few fake (and slightly convincing) bounces here and there but so far that has been to no avail. With a constant heavy supply on the market, and not enough demand, basic economics says that price will go down. I’m not going to get into any of the fundamentals here, that’s not my Forté. But one thing I can read is charts.

The Charts

As you see, this chart has carnage all over it. Its been in a series of downtrends. Its consolidating near the lows. Volume is bearish. The 20 day SMA is now clearly declining, and pretty steeply. The RSI has worked off over-sold conditions.

The one thing going for the chart is that there is a possibly bullish divergence forming here, but I wouldn’t put much stock into that (pun intended). Price action to me is more important.

$FB Daily

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The 30-minute chart is more telling, and a better one to view for more of a “short-term” play. After gaping down post-earnings, there was an attempt at a gap-fill, but this was quickly rejected. It proceeded to sell-off in the next couple of days, and on heavy volume. What it did next was very bearish. $FB tried to rally back above the important 22.25 level but was immediately rejected.  We saw heavy selling after this (lockup related) and are now consolidating near the lows (again, bearish). Until Facebook doesnt reclaim 20.20 ish, it’s hard to play this on the long side.  It’s hard to be short here, but playing the long-trade doesn’t make sense to me yet.

I’m in wait and see mode for now. I’d love to see some strong upside volume, and a close near highs. Followed by consolidation in the upper part of that range (preferably above 20.20).

$FB 30 min

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tags: $FB $SOCL

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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Jerry Khachoyan Blog