Skip to main content

Facebook (FB): It did it again with a much bigger drop

One of our students asked a question regarding Facebook fiasco, following a disappoint earning report: "I picked FB at $172. Would love to here your comments...."

So here is my analysis.

Facebook (FB) shares dropped $41 (19%) in just a few hours on Thursday after the company released disappointing earning results.

After reaching an all-time high @ 218.62, price rolled over on Wednesday (7/25/2018) in the after hour market. The following morning on Thursday during the pre-market hour price reached a low of 169.00 before bouncing up (Image 1).

At 9:30am price opened @175.33, quickly reached a high of 180.13, testing the 200 SMA (red line) before rolling over down to 173.75. Towards the end of today's trading session, price found a base and started to move up closing at 176.26 and forming what's called a spinning top pattern. The spinning top indicates indecision.

On Friday it tried to bounce above the 200 SMA but it failed, printing a bearish engulfing and closing slightly below support @ 175.32. Friday's low at 173.11 is the next support.

Here are the things to watch for moving forward.

If price is able to move above the 200 SMA (red line) resistance line, it will test the upper resistance areas @ 187.05, the mid channel resistance trend line (Image 2), 194.99 and the 50 SMA (blue line).

After that, if price continues to hold support and move higher, it will try to fill the $40 gap that was formed overnight, testing resistance @ 202.21, 209.73 and 214.27.

BUT (and that is a huge but), there are many resistance areas to break.

On the other hand, if price is not able to push through resistance @ 180.24 and/or the 200 SMA (red line), price will rollover, testing the double support @ 169.47 (Image 3).

This area is very important as it is the bottom of the channel. If price breaks below this support, it could reverse course from it's long standing bullish trend to a bearish run.

If that happens, we are looking at a potential drop trying to fill the gap that was formed back in April 2018, down to 165.68 and 159.66. If this areas fails to hold, we are looking @ 155.06 and 150.61.

Good Trading!

Check out our Stock Alert Trading Signal.

30-Day FREE Trial. Start Today!

Image 1

Image 2

Image 3


Trading Risk Disclaimer

All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory agency. This is not an offer to buy or sell stocks, cryptos, forex, futures, options, commodity interests or any other trading securities.

Popular posts from this blog

Kal's Option Trade of the Week - NKE Vertical

The market has been range bound for the last few weeks with volatility on the decline, and earnings all over the place.  So where to go to look for a trade? Nike has already had Earnings and is near a low of the year, so seems like a good option.  As a contrarian that can mean only one thing to me: I have to make a trade with the assumption it will go up from here over the next 45ish days. We will do that by making a Long Call Vertical trade to bet that it starts to head up over the next couple months. For more on my trading and how to join me in real time, see below. Watch  the video  to get the details. Kal Trading Risk Disclaimer   All the information shared in this video is provided for educational purposes only. Any trades placed upon reliance of SharperTrades.com are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, commodities, options and forex, there is also substantial risk of loss. All tr

Mastering Flag Breakouts for Profitable Trading!

    "Flags" are one of the most common chart patterns. Also known as "consolidation" after the stock has moved up, Trading flag breakouts often provide favorable risk-reward ratios.  By defining specific entry and exit points, you can assess the potential profit relative to the risk taken. This risk-reward advantage enhances your overall profitability when trading flag breakouts, or flag break below. ⚐ Flag breakouts offer a well-defined pattern on the price chart. The consolidation phase forms a distinct flag shape, providing a visual cue  to anticipate a potential breakout. This clarity helps you to feel confident enough when to take the trade.  ⚐ Flag breakouts offer high probability setups: They occur within the context of an existing trend . The consolidation phase represents a temporary pause. Once the breakout occurs, it signifies a resumption of the original trend, leading to strong price movements.  By aligning  trades with the prevailing trend, you can

The Stock Market's Next Move: What Will Happen to Major Indices and Mega Caps?

Today we take a look at the major indices and some of the large caps (AAPL, AMZN, BA, DIS, META, MSFT, GOOG, TSLA, UBER). Watch the video to get the insight and what to expect moving forward. Good Trading! Trading Risk Disclaimer All the information shared is provided for educational purposes only. Any trades placed upon reliance of SharperTrades, LLC are taken at your own risk for your own account. Past performance is no guarantee. While there is great potential for reward trading stocks, cryptos, commodities, options, forex and other trading securities, there is also substantial risk of loss. All trading operations involve high risks of losing your entire investment. You must therefore decide your own suitability to trade. Trading results can never be guaranteed. SharperTrades, LLC is not registered as an investment adviser with any federal or state regulatory agency. This is not an offer to buy or sell stocks, cryptos, forex, futures, options, commodity interests or any other tradi