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FB Trade Entry & Setup

Although right on uptrend line support, I have enough confidence to add FB (Facebook Inc) as an Active Short Trade here following today's gap down below the Island Cluster Top reversal pattern. More conservative/conventional traders might opt to wait for a breakdown below this large rising wedge pattern before taking a full position. Suggested stop above 121.25 if targeting T2 (current final target) or above 117 if only targeting T1. T2 (99.46) is the current final target although I may add one additional target around the 90.75-92.40 support zone, depending on how FB & the broad markets trading in the coming days & weeks.

FB daily June 13th

FB daily June 13th

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Jun 13, 2016 11:40am|Categories: Completed Trades - Short|Tags: |5 Comments

5 Comments

  1. schooner June 13, 2016 11:51 am at 11:51 am

    Interesting idea. I think FB maybe holders didn’t like MSFT acquiring LNKD!

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  2. snp June 13, 2016 12:23 pm at 12:23 pm

    seems oversold right now. maybe it backtests the 50 dma and the line price has been bouncing on for weeks at about 115.50?

    1+

    • rsotc June 13, 2016 12:33 pm at 12:33 pm

      Oversold is relative (to the time frame). On the daily time frame, in which this swing trade is based off, FB is still well above oversold readings (on the RSI 14). Even if oversold on the intraday time frames, FB has experienced two very powerful sell signals today: A gap down below the island cluster & well defined 116 horizontal support level plus, since posting the trade entry & setup, FB went on to breakdown below the bearish rising wedge pattern & is currently trading below by a decent margin, although I’d like to see a solid close below today as it’s still close enough to snap back up inside the pattern before the close. Even if that does occur, the wedge, with only 2 prior reactions on the uptrend line, is a distant second to the Island Cluster Reversal pattern. As such, I’d be fine with a run back up in an attempt to backfill today’s gap as long as FB doesn’t close back solidly above 116.70 (and ideally a close below 116).

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      • snp June 13, 2016 9:00 pm at 9:00 pm

        I agree. part of the move today is news (lnkd). much prefer the backtest as an entry

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    • snp June 15, 2016 10:20 am at 10:20 am

      115.46 so far

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