FB (Long/$31.00 Stop) - Since we began coverage on June 5th, FB has had a nice run of about five points. It's been relatively smooth sailing so far. The bulls are temporarily in control and the chart is pointing to a second leg up, a measured move, to the $36 area. FB is however running into a bit of resistance above $33 and as a result we are moving our Stop from $25 to $31.
Facebook has been the classic Wall Street IPO. They get the general public involved in mass quantities, the early VC investors take their profits which causes the stock to collapse and in turn causes the weak handed, individual IPO investor to sell at a loss. Meanwhile, all of the institutional buyers are sitting back and waiting for the panic to subside so that they can begin accumulating the stock. This is exactly where we are today. As soon as the individual investor realizes they were wrong, they will try to get back in at higher prices and that will be the exact time when institutions begin to take profits.