FB 7/23/2013 – Pre-Earnings Chart Analysis


Let’s start with a couple of updates from the previous Facebook (FB) update. First, let’s take a look at the Fibonacci retracement analysis. In the prior update, I mentioned how it appeared FB was gaining momentum to make a move up to the 38.2% retracement line.  On 7/17/2013, FB had an intra-day high of $26.78, $.01 short of the 38.2% retracement line as seen on the updated chart below.

 

Facebook (FB) Fibonacci Stock Chart Analysis

 

Here is my quote from the last FB update – “Notice how FB on the above chart broke above the 50% Fibonacci retracement line on increasing volume as compared to the prior couple of days volume? This also indicates momentum is gaining for the move to at least the 38.2% retracement line. How the computer programs, I mean Wall Street, reacts to the upcoming earnings will dictate FB’s move from there.“.

 

Well, based on the above chart, FB did exactly that – it moved to and touched the 38.2% retracement line (within $.01). After hitting the line, FB has pulled back slightly as it appears to be setting up for its earnings move.

 

At the bottom of my last FB update, I also had another chart with a blue channel that I drew to try and establish a trading zone for FB while moving upwards and continuing this uptrend. The blue channel on the next chart for FB is the original channel I drew from the last update. The green channel is a new channel that could be shaping up, especially if FB has a favorable earnings report coming up this week. The green channel appears to be more appropriate for a stock that is potentially starting a Wave 3 on it’s largest scale, that I previously discussed here. This next chart is a 3 month daily candlestick chart for FB.

 

Facebook (FB) Possible Trading Channels

 

As seen on the above chart, FB has continued the pattern of making higher highs and higher lows during this uptrend. When that pattern stops, that could be your first indicator that the trend has ended (at least temporarily) and it might be time to think about locking in some of those profits. But, if FB truly has entered and just begun a Wave 3, it might be a while before that trend stops.

 

The next chart is just a few of the other trend lines, channels and gaps that I am watching. It is a daily candlestick chart for FB since it’s IPO. Some of the resistance areas I’ve indicated on the chart are areas where I will probably be trading some of my shares while keeping my core position. The legend for this chart is as follows:

  • Red line – resistance
  • Green line – support
  • Dark blue lines – potential long-term trading channel
  • Purple lines – prior gap down resistance area

 

Facebook (FB) and Various Trend Lines

 

There is nothing in the chart that indicates that FB will have a bad earnings, but then again not much takes me by surprise any more with these markets. At this time, the trend remains up. But as always stay prepared and keep your finger on the trigger.

 

Disclosure: I am currently “long” FB and own shares I intend to trade around a core position during FB’s uptrend until I reach my $32 short term target.

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