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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Facebook Stock Chart Tells Of Coming Down Price Move 0 comments
    Sep 24, 2013 7:37 PM | about stocks: FB, GOOG, AAPL

    Facebook Inc (NASDAQ:FB): Stock Chart Tells Of Coming Down Price Move by Market Authority

    Facebook Inc (NASDAQ:FB) is having a fantastic day. The stock hit a new all time high of $49.66. However, the charts tell the future and the future is not green for Facebook. Instead, it is cluttered with down days and a pull back to the $45.65 and $42.45 levels.

    So why when the world is so bullish on Facebook is the top in? The answer is somewhat simple. First, with the world so bullish on Facebook or on any stock, one must be wary as a reversal is likely. A great example of this was Apple Inc. (NASDAQ:AAPL). When the stock was at $700 a share, analysts were upgrading like crazy and the whole world was talking about it. This has now happened with Facebook. Today, happens to coincide with an analyst upgrade as well. Go figure, an analyst upgrades the stock now when it is up 100% in the last few months. Definitely similar to Apple at $700 per share. When looking at the stock chart of Facebook, the first thing that jumps out to me is the symmetry. The price hovered around $25.00 a share for a long period. After earnings it shot up to a high of $49.66. This is a 100% move in the stock. In addition, notice the selling that has come in off the highs today. Major distribution from institutions. Last, notice the tail on the chart today. As the stock declines, it forms what could be a topping tail on the daily chart. Should a topping tail form, it will solidify a major top in the stock for a pull back to the mentioned levels of $45.65 and $42.45. Normally, I do not mention valuation but even that is way beyond stretched.

    Facebook Stock Chart

     

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    Stocks: FB, GOOG, AAPL
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