cactiman
Registered: Dec 2011
Posts: 962 |
08-18-12 02:20 PM
Quote from nillionaire:
I went long FB at 19.08 today and am holding over the weekend. A second straight close near the day's low is a bit concerning, but I wonder if that means Monday's close is likelier to be near the high?
Anyway I do find it interesting it showed strong support at 19, which is 50% of the IPO price. I looked at similar stocks to see how they reacted once they dropped around 50% of their IPO price:
ZNGA priced at 10, then dropped down to 4.78 (a 52% drop), and then bounced up to 6.35 (a 33% rise).
GRPN priced at 20, then dropped down to 9.63 (a 52% drop), and then bounced up to 14.93 (a 55% rise).
P priced at 16, then dropped down to 7.83 (a 51% drop), and then bounced up to 12.3 (a 57% rise).
I checked a few other stocks like LNKD, YELP, and Z, but those never dropped under their IPO price.
Hopefully this pattern continues with FB as well and it bounces from here into the mid-20s.
It's good you're looking for patterns, but a support level needs to be longer than 1 day.
In FB's short life, I've seen 3 sideways channels which could be called support levels.
They're marked on the attached chart at around 31 (lasted 18 days), 28 (lasted 8 days), and 20 (lasted 10 days).
The 20 level gave way on Thursday, and there hasn't been time for a new support level to form yet at 19.
Even if a support level forms at 19, there's not been any pattern of FB rallying off of these past levels.
All FB has done is pause for a while, and then break down through them to go lower.
You are betting against FB's "long term" Trend, which is DOWN!
The odds are way against you.
SELL on Monday!
P.S.
Here's a good recent article about FB's pricing:
http://finance.yahoo.com/blogs/dail...Daily+Ticker%29
 fb08172012.png
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