Index funds required to buy FB as part of their portfolios since on December 20th it will be added to the S@P 100 and 500. Anyone shorting will be crushed!! Should be easily over 60 by year end. Also helped by heavy short covering
Sentiment: Strong Buy
To me the tale tell sign will come on the 20th....Volume.....86M on Friday was just a little above the 3 month average..To me, the hype of it getting added..This week, volume will tell alot on FB..I believe shorts will get crushed, I would go as far as to say, when we get back to 58, it will be alot of resistance for awhile, but should break through and possibly 60-65 would be the next. 60 would be very accurate by years end, but with earnings in Jan, 65 would not be out of the question..IMHO
Most of the shares have already been added. It will be approximately 196M shares. Many funds already have FB in their funds prior to the announcement and many would have added just prior to the announcement. The remaining shares most likely have been added this week.
There are not enough shares short to cause much of a rise from covering. There may be some momentum and if there is that will cause FB to rise but S&P fund buying is almost over (look at the volume on Friday).
That is incorrect... There are 1300 mutual funds and 13 ETF's that use S&P as their benchmark. While none of them will be required to include FB in their portfolio, most will be inclined to do so based purely on the size of FB's market cap. NONE of them will be allowed to own a single share of FB in their prospective portfolio's until the 20th. The run up we are seeing now is based purely on speculation moving into said inclusion.