Facebook, Inc. provides various products to connect and share through mobile devices, personal computers, and other surfaces worldwide.
Take a look at the 1-year chart of Facebook (NASDAQ: FB) below with the added notations:
FB had been trending higher and higher off of its March low, but this week’s earnings report crushed the stock. If the stock hasn’t found support yet, the key level at $170 (blue) is certainly a possibility, being that $170 has provided both support and resistance many times over the past 10 months.
The Tale of the Tape: FB has a key level at $170. Traders could enter a long position on a test of $170, with a stop placed below the level. However, traders that are bearish on the stock might have an opportunity to get short if FB were to break back below $170 again.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT