keep in mind that although this site is heavily geared towards technical analysis, my professional life before i became a trader was heavily focused on fundamental analysis (i went on to a 13 year career as a stockbroker after graduating with a business degree). although facebook didn’t have any charting history to forecast where prices might be heading in the future, i could make a strong case from a fundamental perspective that the stock was extremely overvalued and over-hyped at the IPO price. FB is currently down 40% from it’s opening day highs and although there will almost certainly be some rips and dips along the way, i continue to believe that the stock will likely settle in the mid-teens ($15 price target) before all is said and done.
note: i am not short FB (although i would still be had they had any shares to short on the IPO day) and at this point, although i believe the stock will likely drift lower over time, i don’t care to trade any stock, long or short, that doesn’t have a well established chart history to base my trade off of. maybe had FB shot much higher on the first day of trading and was still in the mid 40’s or above i might short it but at this point, with the stock in the mid-20s, i’d rather find other fish to fry. therefore, a trade or investment in FB, either long or short, it highly speculative IMO. also keep in mind; it is the psychological effect that the facebook’s IPO faceplant will likely have on investor sentiment that could have a ripple effect on the broad markets.
