To update this blog post about Facebook’s sudden resurgence, you can see on the daily chart below how the stock not only became overbought, but stayed so. After a six-month IPO sell-off and subsequent base, the chart is clearly signaling accumulation (buyers of size layering in aggressively) in its volume pattern to accompany the recent base breakout.
When you see a stock that fights hard to avoid an initial steep price correction, it tends to be wildly bullish for the intermediate-term timeframe as it denotes strong and persistent underlying demand for shares. Here, Facebook is riding along its upper daily chart Bollinger Band in lieu of a correction.
Given the gap-up this morning, I would not buy Facebook right here, right now, but you can be sure I am stalking any consolidation for a swing long entry point.
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I put on a small “taster” position in the low 21.00s last month and have been adding to it since (as it has pleasantly sailed past my projected resistance zones). Hoping this one turns into a decent trend longer term. Hope you’ll continue to keep us all posted on your thoughts on the ‘Book!
Nice, Ben. Thanks.
Hard to find a market blogger more disciplined with his ideas than chessNwine. He repeatedly said he must wait 6-9 months before seriously considering putting money behind an IPO. And here we are almost 7 months later.
Thanks for all the good work man!
Thanks, charlie. Appreciate it.