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Facebook, Inc. (FB) Message Board

  • wwwhead222 wwwhead222 Sep 26, 2012 2:37 PM Flag

    Cup and Handle forming?

    I'm not an expert on chart patterns, but it almost looks like we have a cup and handle forming between the end of July and September 19th (the cup) and from there until now creating the handle. If true, that would definitely be a bullish sign.

    Personally, it would not surprise me to see FB trade back up to the $28, or even $32, level that it was at only two months ago. The Barron's article was crap and, if this market holds up, I believe FB will see much higher levels from the $19.80 price we experienced today.

    There are a lot of money managers that would love to be part of a 30%+ move to catch up on their lagging performance against the S&P benchmark. FB moving from $20 to $28 gives them what they are looking for and helps out a lot of related, underwater, funds that were left holding the bag in the meantime.

    Do all the "fundamental" analysis that you want, but I believe the recent "shakeout" coupled with Barron's garbage analysis have given money managers the opportunity they needed to load the boat with FB shares at relatively low prices. Now we have the fuel and the motivation to move up, IMO. In the absence of deep knowledge on FB's ultimate strategy and ability to execute, no one can be proven right or wrong on a valuation. However, given other factors and motivations at play in this stock, I think this thing is headed higher.

    Unless we have a major geopolitical event, I'm on record as calling a bottom in FB today. I put some money where my mouth is as well. If I'm wrong, then you can throw it in my face later, but we'll see about that.

    Sentiment: Buy

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    • "Unless we have a major geopolitical event, I'm on record as calling a bottom in FB today."

      for this week? for this month? for this year? forever?

    • A toilet bowl is forming.

    • I see muppet Fu-Bar shape with longs getting paddled like a school kid in Texas.

    • Shorting into November, buying back in December. Chart patterns will become useful towards the end of post-lockup insider sales. We know it's coming.

      • 1 Reply to liickwid
      • The time for going short all-in is obviously not yet present. It is the Oct.29th that may bring havoc to the stock. So anything can happened from now and that time. Which means we still have 1 month of regular trading. Considering that only 146 million shares will be avialable on Oct.14th, that might not be enough to bring the stock much down...meantime, still a hot trading stock!

    • Several things you must consider. First is that the other side of your cup needs to reach around 29 to become a cup. It is way to low now to form this pattern. The second thing is this is very short pattern. Patterns for continuation are usually much longer than a two months. The third thing is that the bottom of the cup is really not consolidation but several days to week spurts both up and down. More important than the pattern when you are analyzing charts are the reasons the you can read that a stock is going up and down. A cup shows a drop and period of consolidation then there is a rise to the former level and then a retrace and a continuation. The consolidation period and the time the stock consolidation has a lot of validity in causing a pressure on a stock in the cup and handle pattern. Triggers can be breaks out of a channel (typically low side) as well as volume to name a few.

      One thing to notice when charting is to not use one method to analyze the stock. The other is to use volume and trigger points and confirmations to the pattern. Even with that said, the patterns are still not absolute indicators.

      It appears as though you are looking for FB to go up and you are looking for evidence in the chart. I am not saying this to be bad. If you have a bias, you cannot read charts or technically evaluate a stock. This is because you want it to go in a certain direction and you look for reason to support your bias.

      Most traders are swing traders which means they don't have either a long or short bias. (even though a lot do)

      The best thing to do is to say I am long because I believe in the stock or I am short because I don't believe in the stock. You can also wait for good times to trade. The most successful traders will follow the trend. The traders who try to predict counter trends are often wrong.

      To make this long story short, there is not a cup and handle pattern. Good luck!

 
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